Tags: Signs | Nasdaq | Reversal | rick | pendergraft

Signs Are Pointing to a Nasdaq Reversal

By Rick Pendergraft   |   Tuesday, 26 Oct 2010 08:43 AM

There are hundreds of technical indicators out there for individual stocks and for the overall market.

When it comes to sentiment indicators on the overall market, there just aren’t that many. I recently found another sentiment indicator provided by Market Harmonics.

According to Market Harmonics, the indicator measures the bullish versus bearish sentiment based on trading in Nasdaq stocks. It is best used by comparing the sentiment index performance against the performance of the Nasdaq itself.

If the sentiment index is climbing and the Nasdaq is flattening out, it is a sign that reversal may be at hand. It also warns that extreme high or low readings could be signs of a reversal in the market.

The current index is at a seven-year high of 246.53.

The two previous highs have come at market tops: October 2007 and April 2010, under 200.

These two high points in the sentiment index don’t even come close to where the index is now.

One thing I noticed about the index is that it seems to be a little early in its signals.

I took note that the weekly stochastic readings on the PowerShares QQQ Trust look like they are about to make a bearish crossover.

With these two indicators both potentially pointing to a reversal in the Nasdaq, if you have a tech heavy portfolio, you might want to take measures to protect your gains.

© 2015 Newsmax Finance. All rights reserved.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved