87.02 -0.47 (-0.54%) Sell

NDAQ is a falling knife, continues to bleed every investor trying to catch it

13 min read

NDAQ ranked among the worst performers today. On a longer term basis, investors in NASDAQ, INC. made -0.08% per day. Thursday's performance of -0.54% was a underperformance compared to it's daily average.

[Themes containing NDAQ]

NDAQ showed a bearish trend over the last 3 months. During this period NDAQ delivered -4.09% and saw a maximum drawdown of -12.21%. There were 2 short signals during this period that returned a cumulative of +7.72% to investors.


NDAQ has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 Jun, 2017 to 7 Jun, 2018. Over the last 2 years 11 months and 9 days, NDAQ outperformed the SP500 index on 52% days.

During the last three months NDAQ delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +2.58%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -3.11%) was on Wednesday, 14 Nov, 2018. The longest stort-term trend during this period was 9 profitable days, which started on 29 Oct, 2018 and went on till 8 Nov, 2018. This bullish trend returned +9.02% to investors.

The last 12 months saw NDAQ's investors making profits in 6 months and incurring losses in 6 months. NDAQ was less consistent in delivering monthly returs than SP500 index. NDAQ was also a more risky investment than SP500 index as it's worst month in the last year, Sep 2018, returned -10.1% compared to -7.28% returned by SP500 index in Oct 2018. NDAQ had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

My formula for success is rise early, work late and strike oil.
-- JP Getty

NDAQ is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in NDAQ's volatility from 24 Sep, 2018 to 12 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that NDAQ has significant positive skewness in it's return distribution. This indicates that investors can expect NDAQ to recover from drawdowns quickly. Which makes NDAQ a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than NDAQ. Therefore, SP500 must receive a lower allocation than NDAQ in your portfolio. SP500 index usually has shorter drawdown period than NDAQ.

On a general note (since you are interested in NDAQ), CSCO is a large cap that deserves to be closely tracked for investment opportunities.

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