On February 1, 2023 the NASDAQ Composite broke through the Triple Top of 11,525 made November 15, 2022, December 1, and December 13, 2022.
On February 1, 2022 the S&P 500 broke through the Double Top of 4100 made December 1 and December 13, 2022.
On February 2, 2022 the NASDAQ 100 broke through the Double Top of 12175 made December 1 and December, 13 2022.
As of 3:30 today these breakthroughs have held, and levels have not penetrated to the downside.
Nevertheless, we are seeing today pullbacks of stocks, ETFs and indices that have reached overbought levels.
In the recent Weekly Analysis reports we have shown improvement in market breadth. Improvement is shown in rising advance-declines lines and percent of stocks over moving average lines.
Also, we are encouraged in the form of small cap leadership. The Russell 2000 has rallied all the way to its August high, while the large cap S&P 500 has lagged behind. This is shown in our comparative relative strength analysis. Small cap leadership usually coincides with rising advance-decline lines. That's because there are more small caps than large caps in major stock indexes and, as a result, small cap leadership usually improves market breadth.
The NASDAQ 100Index also had a strong week with the index rising to a new six-month high. The fact that it rose faster than the broader market reflects strong buying of beaten down technology shares. Falling bond yields contributed to that buying.
Stocks in general saw some profit-taking today, Friday, on news that the January jobs report came in much stronger than expected. That unexpected strength in jobs raised concerns that the Fed may need to continue raising rates and keep them higher for longer. That strong report also boosted interest rates and caused some profit-taking in bonds. Bond yields are showing topping patterns.