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Let’s see if the new high-new low indicator can do it again.
About a month ago (November 21st to be exact) I noticed that the new high-new low indicator was flagging an inflection point in the market.
As a quick refresher, the new highs-new lows indicator is calculated by taking the new highs in an index or market and dividing by the sum of the new highs and the new lows.
Anyway, here’s what I wrote then:
On November 21st the S&P 500 index closed at 1416.77 (green arrow) — within two days, the market action took the index down to 1407.22 (on November 26th). And that was it.
From there on it started to climb. Except for a slight pause, it went all the way to 1520.
Not a bad call at all, if I do say so myself
So let’s see what the same indicator is saying now:
Yesterday’s close took the indicator for both Nasdaq and the NYSE down to less than 5%. Those are abysmally low numbers which means we are very oversold and close to an inflection point.
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