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LIVE MARKETS Nasdaq Composite: Can it rise to the challenge?

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  • US equity index futures firmly higher
  • US initial jobless claims 215k vs 225k estimate
  • Euro STOXX 600 index ~flat
  • dollar, bitcoin up; gold ~flat; crude down
  • US 10-Year Treasury yield slips to ~1.87%

March 3 – Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

NASDAQ COMPOSITE: CAN IT RISE TO THE CHALLENGE? (0900 EST/1400 GMT)

A number of measures of the Nasdaq Composite’s (.IXIC) internal condition continues to show improvement. That said, there is still work to do to add confidence in a more enduring upside turn.

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The Nasdaq New High/New Low (NH/NL) index ticked higher for a fourth-straight day on Wednesday, ending at 14.6%. This put it right on its descending 10-day moving average (DMA), though still shy of its 22.2% February 11 reaction high. read more

Another measure, the Nasdaq daily Advance/Decline (A/D) line also ticked up on Wednesday:

IXICAD03032022

In the wake of a severe nine-month divergence, the A/D line had already, once again, broken below its 30-DMA as the Composite was peaking in November 2021.

Since then, the 30-DMA has been capping A/D line strength, leading to new lows. And in a testament to the recent broad Nasdaq weakness, on February 23, the A/D line hit its lowest level since early 2016.

However, with its improvement since February 23, the A/D line appears poised to once again to clear the moving average.

Since it broke sharply lower in early January, the Nasdaq Composite itself has also been hindered by its descending 30-DMA, which ended Wednesday at around 13,865.

Traders will be watching to see if the Composite, and the A/D line, can both reclaim their 30-day hurdles. Such a turn may confirm the significance of last week’s lows.

(Terence Gabriel)

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Terence Gabriel is a Reuters market analyst. The views expressed are his own

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