{"id":26390,"date":"2026-02-19T07:30:00","date_gmt":"2026-02-19T12:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=26390"},"modified":"2026-02-18T10:49:30","modified_gmt":"2026-02-18T15:49:30","slug":"nasdaq-split-personality-is-a-bearish-sign","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/nasdaq-split-personality-is-a-bearish-sign\/","title":{"rendered":"Nasdaq Split Personality Is a Bearish Sign"},"content":{"rendered":"

The Nasdaq, full of the market’s leading technology stocks, has developed a split personality.<\/p>\n

And that’s bearish for the near-term outlook.<\/p>\n

Early this month, a relatively large number of Nasdaq stocks hit fresh 52-week highs, a positive sign.<\/p>\n

But at the same time, there was a large jump in the number of Nasdaq stocks notching new 52-week lows, a negative.<\/p>\n

Market analyst Norman Fosback (author of Stock Market Logic<\/em>) developed a reliable indicator based on this split personality within the market.<\/p>\n

He observed that when there was a big divergence between the number stocks at new highs and new lows simultaneously, it signaled unstable market action.<\/p>\n

This often led to market corrections with poor returns.<\/p>\n\n

\"\"<\/figure>\n\n

This bearish breadth signal has flashed over 30 times since the mid-1980s. And as you can see above, it has often preceded steep corrections or even bear markets for the Nasdaq.<\/p>\n

The most recent high-low signal was on February 2. Historically, three to six months later, the Nasdaq is up just 54% of the time. Barely better than coin flip odds.<\/p>\n

And returns for the tech-heavy Nasdaq average -0.1% during the next three- to six-month period.<\/p>\n

Some of the worst drawdowns were prior to the 2000 and 2007 market peaks.<\/p>\n

But more recently, this signal flashed in 2019 leading to a -20.9% drawdown four months later.<\/p>\n

And again in 2021, triggering a -29% bear market decline six months later.<\/p>\n

The recent personality disorder in the Nasdaq results from key semiconductor stocks like Taiwan Semiconductors (TSM)<\/a> surging to new highs. But at the same time, leading software stocks like Salesforce (CRM)<\/a> have been crushed, with many making new lows.<\/p>\n

Whatever the reason, this is yet another warning sign for stock traders and investors to be wary over the next three to six months.<\/p>\n

Good investing,<\/p>\n

\"Signature\"<\/p>\n

Mike Burnick
\nContributing Editor, Market Minute<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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