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April 15, 2005
Nasdaq AD Line
How bad is it in tech land? Just ask the Nasdaq AD Line. The S&P 500 and Nasdaq 100 AD Lines have largely mirrored the underlying indices over the last two years. However, the Nasdaq AD Line formed a large negative divergence and moved below its 2004 low this week. Whereas SPX represents 500 large-cap stocks and NDX represents 100 large-cap tech stocks, the Nasdaq represents over 3000 stocks. This includes the good, the bad, the ugly, the small, the medium and the large. Most of these stocks are small or medium size tech companies and relative weakness in this AD Line shows little or no appetite for the riskier or high-beta names.
Posted by Arthur B. Hill at April 15, 2005 03:12 PM