The Nasdaq Dorsey Wright Podcast Sep 17, 2026 24m 14m saved
US government bonds with long duration rank last out of the 134 asset-class groups Nasdaq Dorsey Wright scores, and the group directly above them is also long-duration fixed income. The whole asset class is now within a few points of ranking below cash.
Breadth indicators usually deteriorate slowly enough to argue about. This week's readings did not: the bullish percent for the NYSE reversed into a column of O's from around 60 to roughly 45, and the longer-term %NYSE reading came down to exactly the 50% line that separates a market where most stocks are participating from one where they are not.
"Are the majority of stocks participating in upside or are they not?"
David Clark and Trevor Plesco publish the point-and-figure research behind Nasdaq Dorsey Wright's relative-strength models, and recorded this at about 1:40 p.m. on 16 September, roughly half an hour before the Fed decision, with the market pricing about a 90% chance of a hike.
The full episode is covered here so you can skip it. 24 minutes of audio, 10 minutes of reading.
Here are the 11 charts that matter.
Key Takeaways
Bullish percent for the NYSE reversed into a column of O's, from about 60 to roughly 45
The longer-term %NYSE reading sits right on the 50% line of demarcation
Short-term indicators are low but not yet in washout territory, which is where the best returns start
The 10-year Treasury yield went above 5% for the first time in 19 years, most of it in two weeks
The weekly overbought reading on that yield is above 100%, last seen in 2024
US long government bonds rank 134th of 134 asset-class groups
Inverse fixed income is the second-strongest fixed income group, which the hosts called wild
1. A Negative Week
Almost everything fell. Plesco ran the numbers: the core bond ETF AGG down about 1%, the S&P 500 down a little more than 1%, developed markets down about 2.8%, the Russell 2000 down 3%, and emerging markets worst at about 4.1%. Commodities were the exception, which he said has become the pattern.
"And really, a lot of what we've seen over the past week has been just negative action out of most indices." — Trevor Plesco
"So, I mean, broadly speaking, pretty negative action across the board, both for domestic equities and international equities there, with just a slight uptick in commodities, which has kind of been a common theme here recently." — Trevor Plesco
Clark noted that September is behaving the way September usually does for equities, and that the crude-oil-related strength discussed on the previous week's episode has continued.
2. NYSE Breadth Reverses
The bullish percent for the NYSE measures how many stocks on the exchange are on point-and-figure buy signals. Plesco said it has spent close to a year inside a narrow band, well away from the traditional 70 and 30 extremes, and that this week it broke lower rather than merely wobbling.
"And one of the main ones, at least as far as like broad market universes that we look at, bullish percent for the NYSE, and a lot of those, you know, really from short to long term, those NYSE indicators have seen notable moves lower, not only just reversals, but move below prior low points in some cases." — Trevor Plesco
"But I mean previously we're at somewhat alright levels around 60, but I think with recent action reversed back down into a column of O's." — Trevor Plesco
"Fewer stocks contributing to upside, obviously not a good thing." — Trevor Plesco
3. The 50% Line
The longer-term reading, %NYSE, reversed down late in the previous week and came to rest at 50%. Clark said the number sounds arbitrary and is not.
"But I mean, in terms of breadth, in terms of health of the market, that is the line of demarcation." — David Clark
"Are the majority of stocks participating in upside or are they not?" — David Clark
"Yeah, and we have historically seen, mean, the majority of upside in the market does usually occur when it's above that fifty percent line of demarcation." — Trevor Plesco
4. Not Yet Washed Out
The short-term indicators have fallen to low readings without reaching the extreme levels the firm treats as a buy signal. Clark explained the mechanics: below 20%, a column and a half is ten percentage points and the next column and a half is five, so getting from here to washout requires a wholesale shift rather than more drift.
"We're not there yet, but that's really the next line or next hurdle that we're sort of watching for, if these indicators go ahead and tip that scale to move into washed out territory, or if we really kind of settle here and find our feet again." — David Clark
"I mean, one of the popular sayings that I've heard, I feel like, is an oversold security can always become more oversold, or sell off harder too." — Trevor Plesco
Both said the signal to wait for is the reversal out of those levels rather than the levels themselves, and that there is no fixed duration for how long a washed-out condition lasts.
"Really want to watch out for those reversals from those levels." — Trevor Plesco
"And that's historically been some of the best signs from those washed-out levels." — Trevor Plesco
5. Ninety Percent Odds
The recording was made about half an hour before the Fed announcement. Plesco gave the market-implied probability and noted how fast it moved.
"Currently market expects about ninety-ish percent chance of a Fed hike here." — Trevor Plesco
"Yeah, it felt like two weeks ago it was sort of the conversation was like, yeah, we're probably not going to see it, but then it was like almost over this weekend—really end of last week, over this weekend—we saw those chances for a rate hike move from something like in the sixties to above ninety." — Trevor Plesco
"In the longer term, or at least through the end of the year, currently market expecting kind of about two-ish—cuts through, or two hikes, sorry—through the rest of the year, including this week." — Trevor Plesco
6. The 10-Year Above 5%
The chart Clark called the most notable action in years is the 10-year Treasury yield. It crossed back above 5%, a level the two of them had to reach back roughly two decades to find.
"I mean, just taking a look here, pulling up and sharing the chart, we actually moved back above 5% for the first time, I think in like a decade plus." — David Clark
"But 19 years." — Trevor Plesco
"And really, I mean, we started the year off around four percent, now up at five percent." — Trevor Plesco
"Yeah, and the bulk of that move from like roughly 4.75 to 5 has transpired in the past two weeks." — David Clark
On the point-and-figure chart the move sits on four consecutive buy signals, with the run since the fourth continuing on a column of X's.
7. An Overbought Reading
Clark applied the firm's overbought/oversold measure to the yield, which compares where a security sits against its average over the last 10 weeks and how far it has traveled in that time. The reading is above the top of the band.
"But we haven't really seen a move above that hundred percent mark since twenty twenty-four." — David Clark
"So anything above 70 or 75 percent, we might say a little bit overheated or overextended there in the near term." — David Clark
Plesco said a pullback from here would be ordinary chart behavior rather than a signal, and drew the distinction between a price falling back and a price standing still while the band catches up.
"And I mean, even at this point, just looking at the chart, a pullback to even like 4.8% would be healthy chart action." — Trevor Plesco
"It absolutely could continue higher from here." — David Clark
8. AGG at 2025 Lows
The mirror image of an overbought yield is an oversold bond fund. AGG, the iShares Core U.S. Aggregate Bond ETF, is at its lowest price-return level since January 2025 and completed a second consecutive sell signal near the start of September.
"Yeah, I mean, on that default chart there, completed its second consecutive sell signal there near kind of the start-ish of September." — Trevor Plesco
"As rates move higher, typically the price of existing bonds moves lower." — David Clark
"So, I mean, we are nearing the bottom of that band." — Trevor Plesco
Clark pointed out that the January 2025 level, around 95.75, coincides with a support level from 2024 that the fund was unable to break through, and that it appears to be holding for now.
9. Dead Last of 134
Nasdaq Dorsey Wright scores every fund from zero to six, assigns funds to groups, and averages the scores to rank 134 asset-class groups. Plesco walked through where fixed income sits on that page, and the answer is the bottom.
"Currently, out of all of those 134 groups, that ranks dead last of all of those groups. And easily it's last by a good margin there." — Trevor Plesco, on US long-duration government bonds
"It's been quite some time since we've seen a whole lot of change to them, because most everything is scored pretty terribly relative to other assets, especially equity assets and the like." — Trevor Plesco
The group immediately above it is general long-duration bonds, and the one after that is investment-grade corporate credit, which Plesco expected to surprise people.
"So corporate investment grade is maybe the one that I think most people might be—really? It's scoring that low." — Trevor Plesco
10. King of the Losers
Within a weak asset class there is still a ranking, and the hosts went through the top of the fixed income list. Convertible bonds lead, which Clark said makes sense given they carry equity upside. Second place is the one that stopped them.
"Or, I mean, oftentimes you can have a weaker group, but there's always—you can always have a king of the losers somewhere, where relatively speaking, one is at least doing better than the rest of the pack." — Trevor Plesco
"But funny enough, inverse fixed income—so essentially kind of going short fixed income—is second among those specific fixed income funds, which is pretty wild, but really just kind of underscores how much weakness we have seen here." — Trevor Plesco
"Not necessarily recommending that you go out ahead and short fixed income." — Trevor Plesco
The other relative bright spots he named were floating-rate funds, which reset as rates rise, and emerging-market and global income, which are not tied only to US rates.
11. Fixed Income vs Cash
Clark pulled up a line chart comparing the all-fixed-income group against US money market funds, and found the two converging.
"And currently they are nearing a potential cross here—U.S. money market and all fixed income. If they crossed, it would be the first time since 2023." — David Clark
"Yeah, closest they've come since then. And they're just a few points away from each other." — David Clark
The all-fixed-income group is the widest basket the firm scores: every fixed income mutual fund and ETF it tracks. Plesco treated a drop below cash as a signal about the whole asset class rather than a curiosity.
"So definitely something to keep an eye on, especially with the Fed meeting today, rates continuing to push higher, especially with fixed income in your portfolio—like most of you probably do, at least for select clients." — Trevor Plesco
"Definitely makes sense to go a little bit more tactical in the broader group, own those areas of relative strength that might be able to sidestep or be relatively less harmed with further increases in rates." — David Clark
Bonus Insights
The two opened with Virginia weather and Clark turned it into the market analogy: September in the mid-Atlantic cannot decide what it wants to do, and neither can the market
Clark's framing of why washed-out readings produce the best returns was deliberately unglamorous. Plesco finished the thought: "there's more room for it to kind of recoup things"
The overbought/oversold measure is not used the same way on rates as on stocks, Clark said, which is why he described the reading as extended rather than as a sell signal
Plesco's practical advice for subscribers was to set up the fixed income view on the asset class group scores page, on the grounds that the rankings will move if the rate environment turns
The pair's bottom line is that breadth, rates and fixed income are all telling the same story, and that the level to watch is not the yield but whether the whole bond asset class slips below cash.
Products, Companies & Tools Mentioned
Nasdaq Dorsey Wright asset class group scores (Scores every fund zero to six and averages them into 134 groups; US long government bonds rank last)
iShares Core U.S. Aggregate Bond ETF (AGG) (Down about 1% on the week, at its lowest since January 2025, with a second consecutive sell signal)
Bullish percent for the NYSE and %NYSE (The two breadth indicators the episode turns on; the first reversed from around 60 to roughly 45, the second sits at 50%)
The 10-year Treasury yield (Above 5% for the first time in 19 years, with the move from 4.75 to 5 happening inside two weeks)
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