Analyst Commentary:

• The S&P 500 gained 1.15% over the past week. While small caps led for much of the year, the trend has reversed as the Russell 2000 (RUT) has fallen more than 8% from its previous highs and now sits on consecutive sell signals.

• The ten week for the S&P 500 reversed back into Xs from washed out levels, signaling an increase in near-term participation. However, the bullish percent for the S&P 500 remains in a column of Os, as intermediate-term participation remains on fragile footing.

• While markets have been a bit quiet recently, we would expect to see volatility expand as we open Q4. When the market’s “fear gauge” (VIX) reaches low levels, more often than not volatility picks up over the next 30 days.  Traditional support for SPX is found roughly 3% away from current levels at 7550.

• As concerns about valuations grow, the Nasdaq 100 (NDX) reversed down from previous highs, highlighting investor sensitivity to signs of slowing momentum within the AI space. Still, the long-term picture remains healthy for now.

• Technology, energy, and biotechnology led Q3 performance, though leadership rotated beneath the surface broadened out. Despite recent weakness, technology remains the dominant year-to-date leader.

Nasdaq Dorsey Wright’s Weekly Featured Chart:

 To read more on Q3 ETF Performance, you can read Wednesday's featured article HERE.

Major US Index Technical Review:

A summary of the performance of major indices, in addition to their Point & Figure information. 

Nasdaq Dorsey Wright Products:

Is there a middle ground between individual stock picking and passive investing?  Watch this video on the Invesco DWA SmallCap Momentum ETF (DWAS) by our Senior Portfolio Manager, John Lewis, CMT to hear our view.  To learn more about DWAS, click HERE.

Want More? Don't Miss Out on Our Podcasts!

Head of Investment Insights Yanni Angelakos sits down with Portfolio Manager John Lewis and Analyst Miles Clark to break down what's driving markets heading into Q4. They cover key risks, opportunities, and where they see positioning shifting from here. To listen now, click HERE or on the image below. 

Want this Update in Email Form? 

Keep your finger on the market's pulse with the NDW Lite Newsletter, your essential relative strength guide to markets. Each week, the NDW research team provides concise commentary on developments within asset classes, sectors, and other market trends. Click HERE to subscribe.