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Stocks Are Overbought, so What? | WAYT

The Compound and Friends

CHAPTER

The Momentum Effect in the NASDAQ

Since 1986, the NASDAQ has posted its best six to 12 month returns when already trading at least 20% above its 200 day moving average. Recent action also marked only the fourth time in the indexes 200 day deviation swung from negative 22 plus 20% within a year. Rather than an indication of froth, we believe this study supports our view that the NASDAQ's long-term advance is resuming.

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