The Nasdaq index has outperformed the S&P 500 since May 2013. It weathered the recent market setback with an orderly decline, then stretched to a new intermediate-term high. Key technical indicators associated with the Nasdaq, however, are flashing warning signs. See the chart below:
The Nasdaq Relative Strength Index (RSI) has held a strongly bullish trend (troughs barely breaking 40), but has recently diverged from the price index, as RSI has struggled to move higher as price has headed north. This is a sign of waning momentum and potentially inviting a possible trading range or modest pullback on the index.
CCI has also hit a rare peak of 225, clearly an overbought measure. Market technicians have learned that an overbought market can be overbought for quite a while. If this lesson holds true for today's Nasdaq, further gains are possible. As a money management strategy, however, setting trailing stops (or protective stops representing a modest loss to long holdings) is a prudent tactic to protect gains and preserve capital, especially as complacency returns to equities.
All the best to your trading and investing,