LIVE MARKETS-Nasdaq hits new highs as market breadth sends a warning
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NASDAQ HITS NEW HIGHS AS MARKET BREADTH SENDS A WARNING
The Nasdaq Composite .IXIC ended Friday at 25,114.44, marking its eighth record closing high of 2026. Pretty impressive on the surface, but under the hood, momentum is starting to sputter.
One key gauge of the market’s internal health, the Nasdaq New High/New Low (NH/NL) Index, has been losing steam, flashing an early warning sign for bulls. Even as the Nasdaq has pushed to fresh highs, this breadth indicator has been moving in the opposite direction.
After hitting 77.1% on Monday, April 27, the NH/NL index slipped below its 10-day moving average last Wednesday and continued to slide, ending Friday at 69.4%. That drop suggests the rally is running on weakening participation, with less overall energy supporting the move higher.
This isn’t entirely new behavior. Over the past five years or so, the NH/NL index has struggled to sustain strength once it approaches, or exceeds, the 70% mark. Its 83.4% reading on September 23, 2025, was the strongest since June 18, 2021, when it stood at 84.9%.
With breadth now diverging from price, the Nasdaq’s advance is becoming increasingly reliant on a small group of heavyweight stocks - namely the Magnificent Seven. Confidence in the rally is therefore hinging more and more on how these mega-cap names perform.
Last week, the Magnificent Seven ETF MAGS.K forged above a weekly resistance line drawn from its October 2025 high. By Friday’s close, however, it was sitting almost exactly on that line, leaving the setup finely balanced. This week’s price action should help clarify whether the group can break higher or instead roll over into a pullback.
At the end of the day, bulls want to see the NH/NL index stabilize quickly and reclaim its 10-day moving average. That would be a welcome sign that strength is returning across the broader Nasdaq.
(Terence Gabriel)
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