📈 Market Getting Toppy?

Let's look at some indicators to help us decide.

Market Topping?

Nvidia made a massive run yesterday to new all-time highs, but despite this, there are some signs that the market may need a short-term rest.

Let’s look at some indicators that will help us understand where we’re at.

Stocks Above the 200 SMA

One indicator I often look at is NDTH, which tells you the percent of Nasdaq stocks that are above the 200 moving average.

This gives you a sense of market breadth and how the overall market performed on a given day, instead of just focusing on specific stocks performance like NVDA.

We dropped 7% yesterday. This is telling us that a significant amount of stocks dropped below their 200 day moving average yesterday as compared to Friday. This is something I would be cautious of.

New Highs/ New Lows

The indicator below the chart is new highs / new lows.

You can see that we are starting to see a negative divergence developing. While the Nasdaq is rising, the number of new highs is shrinking.

I review other indicators and give my take on the market along with specific stocks I am trading right now in the video below: