Chart of the Day - Tuesday, December 1st, 2020

Today's Chart of the Day was shared by Strategas Research (@StrategasRP). It's a chart of the Nasdaq 100 over the past four years. The Nasdaq broke out to an all-time high today for the first time since September 2nd. Prior to September, the index was up more than 75% off the March low. Price was starting to go parabolic and it was due for a correction of some sort.  As we know, markets can correct in one of two ways - through price (meaning a sharp sell-off) or through time ( meaning a sideways consolidation). As Strategas points out, the past three months look like a healthy correction through time. In a comment to The Chart Report, Todd Sohn of Strategas added " The Nasdaq had one of its strongest rallies ever between March and September, If you run a four-minute mile you're gonna need a breather. It's also worth noting that as the Nasdaq moved sideways, other beaten-down areas of the market like Small-Caps, Energy, Financials, and International Stocks picked up the slack in a meaningful way." This sort of rotation is exactly what you want to see if you're bullish because it demonstrates broadening participation. After a three-month pause could this tech-heavy index be ready to reassert its leadership? Stay tuned!