The Nasdaq-100 is the most overextended it's been in a while
I am looking at the distance of the Nasdaq-100 from its 200-day moving average. I am looking as far back as 2015. What we see here is something slightly historic... it's the most extended it's been from its 200-day moving average in a long time.
I examined the chart and the last time the distance from its 200-day MA was above 30 for a long period of time was the 1999 DotCom Bubble. That's not to say there's anything wrong. Because it's true - an overextended market can always become more overextended. Trying to call a top is nearly impossible. It's better to be aware and manage your situation independently with the data before you. So a few notes to keep in mind:
1. For the market to reach it's DotCom bubble extension, or distance from 200-day MA, it would need to rise another 50% or so.
2. Tech still remains very strong and is far different from what it was in 2000. Companies are real, big, and operate around the world. The largest holdings in the QQQ ETF are Amazon, Apple, and more. Large cash piles and products that weave society together.
3. However, as someone who follows markets closely, I am actually not quick to buy or sell anything at these levels. The risk-reward is slightly unbalanced. Now, the March crash does skew the 200-day MA data, but still worth watching this.
Special shout out to @ AlexWe1992 for creating this indicator. It's really cool. Select the moving average, customize the colors of the bars, and then get to work. It's open source and free to use here:
I examined the chart and the last time the distance from its 200-day MA was above 30 for a long period of time was the 1999 DotCom Bubble. That's not to say there's anything wrong. Because it's true - an overextended market can always become more overextended. Trying to call a top is nearly impossible. It's better to be aware and manage your situation independently with the data before you. So a few notes to keep in mind:
1. For the market to reach it's DotCom bubble extension, or distance from 200-day MA, it would need to rise another 50% or so.
2. Tech still remains very strong and is far different from what it was in 2000. Companies are real, big, and operate around the world. The largest holdings in the QQQ ETF are Amazon, Apple, and more. Large cash piles and products that weave society together.
3. However, as someone who follows markets closely, I am actually not quick to buy or sell anything at these levels. The risk-reward is slightly unbalanced. Now, the March crash does skew the 200-day MA data, but still worth watching this.
Special shout out to @ AlexWe1992 for creating this indicator. It's really cool. Select the moving average, customize the colors of the bars, and then get to work. It's open source and free to use here:
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