A warning signal has emerged from the Nasdaq 100 index, indicating a potential shakeout in the market. According to BTIG, the Nasdaq 100 has gone 60 straight trading days without closing below its 20-day moving average, a trend indicator that last occurred in 1999 before the dot-com bubble burst.
This streak is considered troubling as it suggests that the market may be due for some turbulence. Despite this, it’s unlikely to mark a major peak. The S&P 500 and Nasdaq Composite are currently at record highs, driven by expectations of interest rate cuts from the Federal Reserve next week and concerns over the upcoming trade deadline.
However, earnings season is expected to add to individual stock volatility, while reversal indicators show signs of peaking and seasonal trends weakening. The CBOE Volatility Index has been quiet all month, suggesting that greater turbulence could be on the horizon.
More specifically, the ARK Innovation ETF has rallied over 12% this month, defying fears of a pullback. Despite being 38% above its 100-day moving average, it’s still considered oversold relative to the Nasdaq 100.
Investors may want to consider rotating into utilities, which have “prebreakout potential”, according to BTIG. The Utilities Select Sector SPDR Fund is expected to reach the low $90s from around $84, providing a potential buying opportunity.
Source: https://www.cnbc.com/2025/07/21/nasdaq-100-momentum-unmatched-since-1999-so-brace-for-a-shakeout-says-btig.html