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Stock Market’s Narrowing Advance
NDX & SPX Powering Up with Deteriorating Internals
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Today we will be covering...
Today, we will discuss Novo Nordisk (NVO) that we covered in the Value Corner of the Pro newsletter two weeks ago.
We will also discuss deteriorating stock market breadth while the Nasdaq 100 and S&P 500 keep making new highs.
Apple’s Tim Cook promised in the White House $600 billion US investment. We will analyze AAPL and much more in the Pro newsletter.
More on Tariffs
President Donald Trump said he will impose a 100% tariff on imports of semiconductors and chips, but not for companies that are “building in the United States.” — Kevin Breuninger, “Trump Vows 100% Tariff On Chips, Unless Companies Are Building In The U.S.,” CNBC, August 6, 2025.
The Financial Times reports that the U.S. has declared imports of one kilogram and 100-ounce bars of gold are subject to trade taxes. If true, U.S. citizens who tried to hedge the inflation impact of U.S. President Trump’s trade taxes by buying gold bars must pay those same taxes on their hedge. The ruling suggests gold imported between April 9 and August 7 was subject to the tariff, underscoring how tariffs work. Gold importers are liable, and they (not exporters) will be pursued in the courts if they do not pay the tax. Switzerland is the main supplier of these gold bars. — Dr. Paul Donovan, “All That’s Gold Does Not Glitter,” UBS Morning Audio Comment, August 8, 2025.
Novo Nordisk (NVO) Revisited
Since our bullish stock market call in early April, the growth stocks led by Magnificent 7 have advanced handsomely, and many are overbought.
I expect some rotation in value stocks, and a few weeks ago we started to identify some value opportunities such as: lithium stocks, Hershey, NVO, …
NVO Then
Two weeks ago, we analyzed NVO in the Pro newsletter.


NVO Now
One of the reasons for NVO’s prolonged decline was the new drug competition with Ely Lilli.
A couple of days ago, NVO reported 18% sales growth, which caused a pop in the stock price and a Novo Nordisk moment for Ely Lilly’s stock (a sharp drop).
NVO priced popped up more than 10% from a new low and on positive divergence in technical indicators. Just “As the Doctor Prescribed.”
The question is whether this is a lasting low? Cycles suggest it should be for at least several months, and the longer-term cycle-based prospects look good.

Narrowing NASDAQ 100 Advance
The chart below shows a robust V-shaped rebound of NDX since the April low.
It also shows the percentage of NDX stocks above 50D MA (top) and 200D MA bottom.
Orange trendlines show negative divergences of these percentages relative to the NDX’s price.
This is not unusual in bull markets, as the market breadth narrows after a prolonged advance. These divergences could last while the index is still making new highs. See these divergences in 2022.
What is notable is that these percentages fell off the cliff in the last 10 days while NDX still pushed higher.
While a significant fraction of Nasdaq 100 stocks fell, the index pushed higher, led by a short list of stocks, Magnificent 7 and alike.

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BraVoCycles on X
If you are interested in financial markets, you are missing a lot by not following me on X as I do not have enough canvas space in the newsletter to post all my research in it and which I try to post on X. Also, I often post important real-time updates between the newsletters.
Some thoughts about the AI sector. Not a trading/investing recommendation!
Even if it is a bubble, bubbles can last more than most people expect.


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