297 Days and Counting: The Nasdaq's Quiet Trend Signal

• The Nasdaq’s 200-day moving average has made 297 consecutive new highs.

• This marks the 12th such instance since 1980.

• Previous outcomes have led to a 20.5% rally over the following two years.

You'd think investors would be celebrating. The Nasdaq Composite Index has rallied more than 11% so far this year, having recently made new highs. Yet the financial media coverage feels far from bullish. Skepticism keeps mounting over the money being spent on data centers. Despite signs that demand for AI continues to outpace supply, investors continue to question whether these investments will pay off.

Throwing fuel on the fire is a recent report that a Chinese startup unveiled a new AI model. Fears of another "DeepSeek moment" spurred more selling. But we’ve seen this movie before. The original DeepSeek moment in early 2025 sparked similar panic. The media claimed the company had built AI models for a fraction of U.S. costs. But as the details emerged, it was revealed that the discounted prices reflected only the cost of the final training run and did not include numerous other expenses. And U.S. technology stocks rallied for months afterward.

Despite all the doubt, one signal keeps pointing the other way. The Nasdaq's 200-day moving average is a slow-moving gauge of the trailing trend. And late last week, it crossed a significant milestone. It made a new high for 297 straight trading days. And based on what history tells us, the event should underpin a steady rally in the Nasdaq Composite.

But don't take my word for it, let's look at what the data's telling us...

The 200-day moving average (200-DMA) matters because it filters out short-term noise and shows us the long-term underlying trend. It’s the average of the closing price over the last 200 trading days (roughly the past year), recalculated daily. Because it's an average of so many days, it moves slowly, so a single bad week or even bad month barely budges it.

This is not a "smooth ride" signal. The index can still dip along the way, even during a strong streak. A long stretch means the trailing year of price action kept improving without a serious multi-month stumble. Say, for instance, like this month's chip-stock selloff.

Since late 1979, the Nasdaq Composite's 200-day moving average has set fresh highs for 297 straight days or more just eleven times prior. That’s about once every four years. Past streaks lasted between 316 and 581 days. The average duration was 421 days, with a median of 418. And at the end of last week, the Nasdaq reached day 297 of a new streak.

But, as the following table shows, similar setups have led to solid returns for the Nasdaq Composite…

As you can see in the table above, the gains tend to be steady across the 6-, 12-, and 24-month horizons. In addition, all time frames have stable success rates, with eight of the eleven 24-month windows having positive outcomes.

At the end of the day, the case for a steady Nasdaq Composite rally looks stronger than the daily headlines suggest. The long-term moving average has continued climbing for nearly a year without breaking down. History says that kind of persistence tends to feed on itself. Until the trend cracks, the data points toward the rally having more room to run.

Five Stories Moving the Market:

President Donald Trump minimized the prospect of immediate talks with Iran as the two sides exchanged strikes; Trump said he has no interest in meeting with representatives from Tehran until there is a meaningful dialogue – Bloomberg. (Why you should care – Pakistani officials met with Iran’s Interior Minister Eskandar Momeni in an attempt to revive talks)

Iraq's oil minister said it had signed $200 billion worth of agreements ​with U.S. companies during Iraqi Prime Minister Ali al-Zaidi's visit to ​U.S.; minister Basim ​Mohammed said the agreements would ​add significant oil production capacity and increase investment in associated gas projects – Reuters. (Why you should care – Iraq is home to the world’s fifth largest oil reserves)

U.S. President Donald Trump has formally approved a landmark civilian nuclear program agreement with Saudi Arabia; the new deal, which would last 30 years, is estimated to be worth tens of billions of dollars – WSJ. (Why you should care – the agreement appears to give U.S. companies an edge in helping the Saudis develop a nuclear program)

China is mounting one of its broadest efforts in years to steady the stock market, with regulators, state-backed investors, insurers and asset managers all moving to shore up confidence after a selloff in tech shares – Bloomberg. (Why you should care – China is trying to support capital raises by domestic technology companies in an effort to better compete with their U.S. counterparts)

Prime Minister Mark Carney said he and U.S. President Donald Trump agreed to accelerate trade talks ahead of a potential U.S. move to impose 50% tariffs on a range of Canadian goods next month – Reuters. (Why you should care – Canada said it is prepared to respond in kind if the White House follows through with its tariff proposal)

Economic Calendar:

Earnings: CSX, GEV, GOOGL, IBM, MCO, NOW, PM, T, TSLA, TXN, WAB

U.K. – CPI for June (2 a.m.)

U.S. - MBA Mortgage Applications (7 a.m.)

U.S. - Energy Information Administration Crude Oil Inventory Data (10:30 a.m.)

Treasury Auctions $13 Billion in 20-Year Bonds (1 p.m.)