Friday Focus with Ross Healy

The biggest question investors are asking today is simple: how high can US equities go — and how risky is it to stay invested? With sentiment swinging toward fear and many investors moving into cash, it’s understandable that people are questioning whether today’s market levels are sustainable.

At Strategic Analysis, our representative list of value stocks — none of which are high-tech names — is up nearly 38% year-to-date. That raises the question: is it time to take profits, or stay with high-quality, undervalued companies?

The NASDAQ Has Returned to a Historic Level

In our weekly Tuesday client webinar, we reviewed a fascinating chart of the NASDAQ 100. The index has now reached the HB1 line (9.5× book value) — the same structural valuation level where the NASDAQ peaked in 2000. This is a key example of what we often say: the market has a memory. Even valuation highs from 25 years ago can act as resistance today.

Over the past year, the NASDAQ has reached this level three times. Each time, the rejection was sharp — and often fast.

This week, something different is happening:
The NASDAQ appears to be attempting a breakout above that long-term ceiling.

Is the Breakout Confirmed?

To understand whether this move is real, we look beyond the index itself.

1. Is the S&P 500 confirming the move?

Somewhat. It’s trying, but momentum is mixed.

2. Are key megacap stocks supporting the breakout?

Yes — and their importance cannot be overstated.
Both Microsoft and Nvidia are sitting directly on their HB1 valuation levels. Because of their massive weight in both the NASDAQ and the S&P 500, these stocks need to hold structurally for the indices to maintain any breakout.

If they break down, the indices likely follow.
If they hold, the NASDAQ may have legitimate room to run.

Why This Moment Matters

Historically, when the NASDAQ hits this structural ceiling, the reaction is:

• Nasty
• Fast
• Broad-based

A confirmed breakout would be a meaningful and rare signal, not a typical weekly fluctuation.

What Investors Should Watch

In the days and weeks ahead, monitor:

• Whether the NASDAQ can hold above the HB1 line
• Whether Microsoft and Nvidia remain above their own structural floors
• Whether the S&P 500 eventually confirms the move

These indicators will determine whether this is a sustainable breakout — or another reversal from a historically critical valuation point.

We wish you a successful week in the markets, and we’ll see you next Friday for another SVA-driven update.

▶️ Watch this week’s full episode: https://youtu.be/nCoeF2JaNtQ

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