Every investment process must answer the same fundamental question: when does a price move become meaningful? React too quickly and portfolios become vulnerable to short-term market noise. Wait too long and changes in market leadership may already be underway. Finding the right balance between responsiveness and discipline is one of the enduring challenges of investment management. The pursuit of having an objective process that distinguishes temporary price fluctuations from meaningful changes in market behaviour is how many investment advisors have arrived at the door of SIA.
At SIA, this challenge has long been addressed through Point & Figure charting and the three-box reversal methodology. The objective is not to capture every price movement, but to identify changes significant enough to matter while filtering out much of the day-to-day volatility that can distract investors. The result is a disciplined, repeatable framework for evaluating relative strength, identifying support and resistance levels, and generating the Point & Figure signals that underpin SIA's research.
The value of this approach extends well beyond chart construction. Any investment methodology must produce consistent results across different securities, market environments and market cycles if it is to remain relevant over time. The three-box reversal remains a cornerstone of SIA's analytical process because it emphasizes objectivity, repeatability and consistency over subjective interpretation. Rather than attempting to predict every market move, it provides a structured framework for identifying meaningful changes in relative strength and market leadership. Today, we explore this signal through the lens of the NASDAQ.
NASDAQ Holds Ground Near Relative Strength Highs
The NASDAQ Composite Index (NASD.I) appears to be exhibiting positive technical characteristics, supported by a SMAX score of 9 out of 10, which may indicate broad strength across several SIA measures. The index has advanced 0.84% over the past month, 10.44% over the past quarter, and 12.33% year-to-date, suggesting that momentum has remained constructive despite periodic market volatility.
From a technical perspective, near-term support is identified at the 3-box reversal level of 24,583.96, followed by support at $23,629.33 and $20,570.76. Resistance based on Point & Figure vertical count methodology is located at $27,685.53 and should be viewed as a potential upside objective rather than a forecast. The current Point & Figure structure may suggest that the broader trend remains positive while the index continues to hold above key support levels.
The NASDAQ Composite is one of the world's most widely followed equity benchmarks, tracking thousands of companies listed on the Nasdaq Stock Market. Its heavy weighting toward technology and growth-oriented businesses makes it an important measure of investor sentiment toward innovation, digital transformation, and emerging technologies.
Small Caps Stay in a Column of X's as Demand Remains in Control
The Russell 2000 Settle Index (RLS.I) appears to be exhibiting positive technical characteristics, supported by a SMAX score of 9 out of 10, which may indicate broad strength across several SIA measures. The index has advanced 0.71% over the past month, 9.58% over the past quarter, and 19.46% year-to-date, suggesting that momentum within the small-cap universe remains constructive and that relative strength has continued to improve.
From a technical perspective, near-term support is identified at the 3-box reversal level of $2,848.43, followed by additional support at $2,684.14 and $2,431.11. Resistance levels derived from Point & Figure vertical count methodology are located at $3,271.80 and $3,541.67 and should be viewed as potential upside objectives rather than forecasts. The current Point & Figure structure may suggest that the broader trend remains positive while the index continues to hold above key support levels.
The Russell 2000 is a widely followed benchmark for U.S. small-cap equities and is often viewed as a measure of domestic economic sentiment and risk appetite. Its strong year-to-date performance may indicate increasing investor participation beyond large-cap leadership, suggesting that market strength has broadened across a wider range of companies.
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