NASDAQ 100 IS STILL THE STRONGEST MARKET INDEX -- SOME MORE RECENT QQQQ LEADERS ARE ADOBE, CISCO, AND DELL -- NASDAQ BIOTECH LEADERS INCLUDE BIOGEN IDEC AND CELGENE

NASDAQ 100 IS YEAR'S AND SUMMER'S TOP INDEX... Arthur Hill wrote yesterday about leadership in the Nasdaq 100. Today's first two charts show the same thing, but in a different way. Chart 1 compares the performance of the six major market indexes since the start of 2007. The Russell 2000 Small Cap Index (lowest line) has been the weakest (-.50%). No surpise there. All of the others are in positive territory. The top performer is the Nasdaq 100 (black line) with a 2007 gain of +11.80%. The table on the upper left shows the year's performance for all of the others. The Nasdaq Composite came in second at +6.33% just ahead of the Dow's +6.30%. The NYSE and the S&P 500 Indexes have gains of +3.5% and 2.8% respectively. Chart 2 ranks the same six indexes over the last two months (from just before the start of recent market turmoil). Chart 2 shows the Nasdaq 100 the only index in positive territory since the end of June (+1.5%). All of which suggests that if the market is going to strengthen at some point, it may be lead higher by the biggest stocks in the NDX. It also suggests that the NDX may hold up better than other indexes if the market weakens further (or trades sideways).

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MORE NASDAQ LEADERS ... The fact that the Nasdaq 100 is even stronger than the Nasdaq Composite tells us that the large cap technology stocks are the main drivers behind the surge in the former. Yesterday Arthur showed strong chart action in Apple and Intel. I'd like to add three more technology stocks today that are also showing strong chart patterns. The stocks I'm showing combine superior relative performance with size. In other words, I limited my search to the biggest stocks in the Nasdaq 100. [You can do that by using the "Market Cap Mode" feature on the Nasdaq 100 Market Carpet]. That search turned up three stellar technology performers over the last month in the NDX. Chart 3 shows Adobe Systems challenging its July peak. It's relative strength ratio (below chart) shows it starting to outperform the Nasdaq 100. Chart 4 shows Dell climbing above its 50-day moving averagae today. Its RS line is starting to rise as well. Chart 5 shows Cisco nearing a test of its 2007 high. It's been outperforming the NDX since late May. Its RS line is also close to a new yearly high. Adobe and Cisco have the strongest long-term patterns.

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ADOBE NEARS RECORD -- CISCO AT SIX-YEAR HIGH ... Not only is Adobe moving up to test its 2007 high, it's also testing its 2000 high at 43.60. That's what the monthly bars in Chart 6 show. The relative strength line (ADBE:NDX) also appears on the verge of a record high. That makes for strong absolute and relative performance. The monthly bars in Chart 7 shows Cisco already trading above its early 2004 peak at 29.39. That puts Cisco at the highest level in more than six years. Its RS line (versus the NDX) looks almost as strong. Chart 8 shows that Dell has been a Nasdaq laggard. It's been underperforming the Nasdaq 100 for the last two years, and has only recently started to show some leaderhip. It has the weakest chart of the three stocks, but is also the cheapest.

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NASDAQ HEALTHCARE LEADERS ... Some recent Nasdaq leaders are also found in the healthcare sector (mainly biotechs). Three of them show up on today's Nasdaq 100 leader board. All three charts gained more than 2% today and were among the Nasdaq 100's top five gainers. Chart 9 shows Express Scripts on the verge of hitting a new record high. Chart 10 shows Celgene trading up to a new three-month high after bouncing off its 200-day average. It too is nearing a record high. Chart 11 shows Biogen Idec already trading at a new 52-week high. While BIIB may look expensive on the daily chart, its monthly chart gives a different picture. The monthly bars in Chart 12 show the biotech leader testing the upper resistance line in an apparent "symmetrical triangle". [A symmetrical triangle is marked by two converging trendlines]. That upper line may provide some short-term resistance to the stock. A close over the upper line (which goes back seven years), however, would be a very bullish development.

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MARKET ENDS MIXED ... After the big swings of the last two days (down and then up), the market had a relatively quiet day today. Most of the major market indexes closed slightly lower on light volume. Except for the Nasdaq market which showed a modest gain. The last two charts show the day's strongest and weakest stock indexes. Chart 13 shows the NYSE Composite Index losing -.55% and closing just a hair above its 200-day moving average. Breadth figures were negative by a 19 to 13 ratio. By contrast, the Nasdaq 100 was the day's strongest index. Chart 14 shows the Power Shares QQQ Trust (QQQQ) gaining +.33% today on rising volume. The QQQQ also closed just above its 50-day average. The fact that it closed well off its high, however, detracts from the day's gain. The QQQQ also closed just shy of the 48.24 barrier that Arthur Hill gave yesterday. Friday may determine which day's trading told the true story (Tuesday big price drop or Wednesday's big price gain). Once again, financials were the day's weakest sector. The only two sectors to escape losses were technology and healthcare. Bond yields dropped again today as bond prices rose. Volatility also rose. Since tomorrow is also the last trading day of the month, that will allow us to review our monthly technical indicators for any changes.

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