Chart of the Day - Friday, May 2, 2025

🏆  Today's Chart of the Day was shared by Jason Goepfert (@jasongoepfert).
 

• The Nasdaq Composite has rallied +18% from its April 8th low on a closing basis.
   
• When the index has surged more than +14% off a 52-week low, Jason points out that the following week's performance has historically been telling. 
   
• When the index has fallen less than 3% within the following week, the average 12-month forward return has been nearly +40%. Conversely, if it experiences a -3% drop, the average return has been negative by roughly -13%. 
   

The Takeaway: The Nasdaq has surged +18% from its recent low. After similar thrusts, a pullback within a week has historically been a red flag. As Walter Deemer famously said, "When the train leaves the station, it doesn't back up to let latecomers on. If it does, there's something wrong with the train."