Nasdaq's breadth divergence nears a test
QQQ•The Nasdaq Composite ended Thursday at 27,193.34, 1.5% below its record close, while its new-high/new-low breadth index fell to 20.2%, its lowest reading since April 1. The index peaked at 67.8% on August 14 and is nearing its March 31 low of 17.6%.
1. Narrowing participation
The Nasdaq Composite reached fresh record highs this week and ended Thursday at 27,193.34, roughly unchanged for the week and 1.5% below its record close. Nasdaq 100 futures were up about 0.6% before Friday's open, leaving the Composite on track for a possible fourth straight weekly gain. Meanwhile, the Nasdaq New High/New Low Index fell to 20.2% on Thursday, below a trend line from its April 2025 trough.
2. Watching for a turn
The breadth index has declined from 67.8% on August 14 as participation narrowed, while the Roundhill Magnificent Seven ETF gained about 7% over the same period and reached record highs this week. The breadth measure is nearing its March 31 low of 17.6%, which came one day after the Composite's low during the selloff tied to the US-Israeli war on Iran. Traders may watch for signs breadth is washed out enough to support a rebound; the divergence remains unresolved.
