My Nasdaq complacency index, based on volatility, is now at 92.5, with a scale from 0 to 100. That means the Naz is looking overbought to me. The sell signal will occur when the complacency index reverses course and starts to head down.
The OEX complacency index is at 70.2. It gave a sell signal on the 22nd. It still looks bearish to me.
There have been two very different outcomes with the complacency index and Naz after recent rate cuts:
On 1/31, at the time of a rate cut, the Naz complacency index was at 84.16. The next day, it went to 89, and the day after that 69. The index reached 11 by 2/9 and 0 by 2/13. The Naz was at 2,772 on 1/31, and 2,510 by 2/13.
There was also a rate cut May 15. The Naz complacency index was at 94 then. It didn't fall out of the 90s for nine days. The Nasdaq rose from 2,086 to 2,319 in about a week, and then fell back to 2,084 in about a week.
I have no idea whether there will be a downturn or rally this time around. |
