Since late 2018 the Nasdaq has created a bottom and has been on a bullish move that is hard to imagine that it could still be in a bear market rally. Only time can give us an answer and at this time there still is a good chance that a new record high is going to be established. If that is the case then the right side should eventually push that flat line up.
A right shoulder in a bull market would push much higher again, but if a bearish turn awaits us then the right shoulder would just crash. I would give that right shoulder about a 50-60% price retracement and after that, a complete bull market failure can still happen.
At the beginning of bull markets, right shoulders fail to hold back the bears most of the time, but when we are closer to the end of a bullish phase, the right shoulder is less likely to hold.
Last week the Market Vane report showed that on the 12th there were 68% bulls present. That is down from a 24 month high of 91%. The more bulls present in the survey the less chance of a big bunch of stock bulls still to come in. Of course, the only way the bullish herd can push it higher is if they just came out of a secret tunnel they’ve been hiding in. 🙂
God knows the world has been on a massive tunnel digging spree, maybe there is a big group of stock bulls living in the Center of the Earth!
The Gold/Nasdaq ratio is always at work and you won’t find any ratio in your analytical toolbox. The Gold/Ratio of anything always gives us a reading when something is expensive or cheap when compared to a Troy ounce of gold, in US dollars.
A cheap reading once was 1.18:1 and my most expensive reading was 6.38:1. Today the Gold/Nasdaq ratio sits at 5.61:1 which still makes the Nasdaq very expensive.