Nasdaq 100 Momentum
The Nasdaq 100 Index has now recorded a higher close in 7/8 trading sessions, with the final day registering a new 252-day high.
Let's conduct a study to assess the forward return outlook for the Nasdaq 100 Index when the 8-day lookback count for positive closes reaches seven days, and the Index records a new 252-day high.
CURRENT DAY CHART
HOW THE SIGNALS PERFORMED
Results look good across all timeframes, especially the 1-week window. I would also add that the consistency in the three and six-month windows is remarkable. The 3-month window showed 25/26 positive signals from 1987 to 2007. And, the 6-month window has registered 24/26 positive instances from 2009 to 2020.
Let's include one more condition to the study to isolate instances that look even more similar to the current environment. The new analysis will keep the original qualifications in place but now require the Nasdaq 100 to have an 8-day rate of change of 5% or more. I utilized an 8-day rate change as that input value aligns with the 8-day lookback period for the higher closes count.
CURRENT DAY CHART
HOW THE SIGNALS PERFORMED
The results still look good across all timeframes, especially the 1-year consistency. I would note that the 1-2 week results are less robust as the ROC condition created some buyer's exhaustion.