The Nasdaq is almost all the way back


  • Jason Goepfert

    Jason Goepfert

    Published: 2020-06-05 at 11:00:00 CDT

The Nasdaq Composite has almost fully made back all of its losses. After falling more than 30% from its 52-week high, the tech-heavy index has almost retaken that high, pulling within 1.5% by Wednesday. This is, by far, the fastest turnaround in its history. 

By the time the index cycled from more than 30% below a 52-week high to within 1.5% of it, as it did on Wednesday, it never failed. It closed at a fresh 52-week high within three weeks every time. Even when looking at smaller 20% drawdowns, it also never failed.

The Nasdaq has also enjoyed a "golden cross", a mostly ineffective signal that gets a lot of attention regardless. The curious thing about the current cross, when the 50-day moving average rises above the 200-day average, is that it triggered when the Nasdaq was already so close to an all-time high.

That didn't seem to dampen its forward returns much. It was not a great buy signal, but it was not a consistent reason to sell, either.


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.

We also looked at:

  • A closer look at what happens when the Nasdaq recovers from big drawdowns
  • Not a single domestic or overseas index, ETF, bond, or commodity we follow is showing pessimism
  • More than 35% of the funds we follow currently show optimism

The post titled The Nasdaq is almost all the way back was originally published as on SentimenTrader.com on 2020-06-05.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.


Follow us on Twitter for up to the minute analysis of market action.