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Beware! There’s Trouble Simmering Below Surface of  Record Nasdaq Index Highs

There’s Trouble Simmering Below Surface of  Record Nasdaq Index Highs.  The Nasdaq index record highs are being propelled by a decreasing number of stocks that compose the index. That means things are not nearly as healthy for Nasdaq stocks in general as the record highs would suggest, says Jason Goepfert of SentimenTrader. Put another way, notes Mark Minervini, “the Nasdaq composite index is weak.”  In fact the number of stocks composing the index trading above their 200-day moving average has fallen below 50%. And that historically results in bearish returns for the Nasdaq over the following three-to-six months, (see chart) .

Beware! There’s Trouble Simmering Below Surface of  Record Nasdaq Index Highs

Beware! There’s Trouble Simmering Below Surface of  Record Nasdaq Index Highs
Beware! There’s Trouble Simmering Below Surface of  Record Nasdaq Index Highs

However, most of these dates were overlaps. So if we exclude overlapping signals over the past month…

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Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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