Nasdaq nears records as rising breadth supports bullish outlook

US equity index futures were mixed, with changes modest.

August NY Fed Manufacturing came in at 20.6 versus an estimate of 11.0.

The Euro STOXX 600 index was off about 0.1%.

The dollar declined, gold was up slightly, bitcoin and U.S. crude gained.

The US 10-year Treasury yield edged up to about 4.71%.

The Nasdaq Composite (.IXIC) appeared ready to pick up where its rally left off after breaking out of a short-term bullish pennant last Thursday, a pattern that often signals the resumption of an uptrend. Friday, however, brought a slight setback. The index couldn't get above Thursday's intraday high of 26,875.52 and drifted lower, ending the session at 26,729.16.

Even so, the broader picture remains encouraging. Support levels continue to hold, and the Composite remains within striking distance of its record highs. As of Friday's close, the index was just 1.35% below its June 2 record closing high of 27,093.901 and 1.7% beneath its June 1 record intraday peak of 27,190.207.

The setup could improve further on Monday. E-mini Nasdaq 100 futures are up about 0.2% in premarket trading, and a move above last Thursday's intraday high would increase the odds of a fresh run toward record territory.

Meanwhile, the market's internals are sending a positive signal.

The Nasdaq New High/New Low (NH/NL) index, a closely watched measure of market breadth, has been trending higher since bottoming at 32% on July 31. It has now climbed for 10 straight sessions, ending Friday near 68%, its strongest reading since June 5. That's a sign that more stocks are participating in the advance, helping provide the fuel needed for the rally to continue.

That said, there are still some hurdles ahead. The NH/NL index reached 72.6% in early June and 77.1% in late April. Bulls would like to see those levels surpassed, as that would offer stronger confirmation that participation and momentum are continuing to improve.