Wall Street has continued to reach new record highs in October, but one major index is noticeably absent from the list, according to Raymond James. Quantitative and technical strategist Javed Mirza pointed out in a note to clients that the Nasdaq 100 has not reached a record high since July. The struggle of this tech-heavy index may indicate that the broader bull market is approaching a new phase and nearing a peak, as per Mirza’s analysis. “The Nasdaq 100 is a good representation of the more ‘growthy’ areas of the market, and this negative divergence suggests that Portfolio Managers have started to move away from growth-oriented sectors, which aligns with a shift into the later stages of the current 4-Year Cycle. Despite the S & P 500, TSX Composite, and Dow Jones Industrials hitting new all-time highs, the Nasdaq 100 has not been able to surpass the highs it reached in July,” Mirza stated. The Nasdaq 100 has not seen a new record high since July. Currently, the Nasdaq 100 is trading approximately 2% below its record close. Based on technical indicators, it is unlikely to bridge that gap anytime soon. “The Nasdaq 100 recently triggered a new short-term ‘mechanical sell’ signal, setting it apart from other North American equity indices,” Mirza noted. The Nasdaq 100’s decline is not the only sign pointing towards a new phase in the bull market. Other significant indicators include the Cboe Volatility Index (VIX) showing higher lows, the Canadian TSX Composite outperforming the S & P 500, and WTI crude oil surpassing $94 per barrel would be a fourth indicator, according to Mirza. However, even in the late stages of a bull market, the rally can continue for a significant period. Mirza believes that the “path of least resistance” still favors higher stock prices overall leading into 2025.
