On the heels of a week slathered with lifetime highs, let’s review some important index charts.
We begin with the NASDAQ Composite, which is on the cusp of breaking above its triangle pattern. Unlike the likes of the S&P 500, the NASDAQ is not at lifetime highs (those having been achieved three months ago), but it wouldn’t take much at this point to topple those records.
Below is the Dow Industrials going back one-eighth of a millennium. Its resistance trendline, anchored to the 1929 top, has actually been beaten, illustrating how overpowered this market is. We are above even the highest prices that the Dow “should” be at.
Coupled with this, the Dow 20 Transportation Index is hammering out what could be the bullish pattern to launch both it and its big brother toward new highs. The transports have been underperforming for years now, but if 2025 is going to be a bullish year, this index would probably help lead the way higher.
The broker/dealer index also lurched to a lifetime high, and it remains on the underside of its broken ascending trendline.
Similarly, the S&P 500 its beneath its broken trendline. Obviously, this does not necessarily mean that the index is going down, since the trendline is ascending in the first place. Compare the breakout of the SPX, which took place a couple of weeks ago, with the prospective breakdown of the NASDAQ, discussed above.
The gap remains intact with the semiconductor index. As with tech stocks in general, it remains well below lifetime highs.
The S&P 100 broke out late in September, just like the SPX. What’s tricky about lifetime highs is that there’s nothing bounding the price action. In other words, there are no clear levels of resistance, since lifetime highs tend to beget new highs until there’s some exogenous reason for them to stop.
Similar to the $COMPQ, the NASDAQ 100 is at the cusp of what could be an impressive breakout, allowing it to “catch up” with the likes of the Dow.
What I continue to call the existential risk to the one or two bears left alive on Earth is the small caps, the Russell 2000. They had a very strong Friday, climbing over 2%. This index has been range-bound for literally years, but if 2025 is going to be Yet Another Bullish Year (which has been the case continuously since 2009), the small caps are probably going to lead the way.
