New Highs and New Lows
The New Highs Indicator is a three-day moving average of the number of individual stocks that closed at their highest price of the last 12-months.
The New Lows Indicator is a three-day moving average of the number of individual stocks that closed at their lowest price of the last 12-months.
The New Highs - New Lows Cumulative Index is a cumulative total of the number of new highs minus new lows.
If the market is reaching new high ground, then one would expect the New High Indicator to be at its peak. If the market is reaching new low ground, one would expect the New Low Indicator to be at its peak.
If the market makes successive new highs but the New High Indicator shows progressively lower peaks, then an investor needs to be cautious. This non-confirmation may indicate a deterioration in market leadership and an increase in market risk. And the same, in reverse, is true at market bottoms.
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The New Lows Indicator is a three-day moving average of the number of individual stocks that closed at their lowest price of the last 12-months.
The New Highs - New Lows Cumulative Index is a cumulative total of the number of new highs minus new lows.
If the market is reaching new high ground, then one would expect the New High Indicator to be at its peak. If the market is reaching new low ground, one would expect the New Low Indicator to be at its peak.
If the market makes successive new highs but the New High Indicator shows progressively lower peaks, then an investor needs to be cautious. This non-confirmation may indicate a deterioration in market leadership and an increase in market risk. And the same, in reverse, is true at market bottoms.
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posted by Bob Moser at
4:39 PM
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