What is the Decline on the NYSE's New Highs Trying to Say?
Today's chart show's the raw daily data on the NYSE's daily New Highs. On this chart, a minimum of 100 is a very important level in a rally. 150 is what I want to see. (50 is neutral.)
After looking at the "A" shape resistance lines, two things can be observed on today's chart:
1. That the New Highs were at a healthy 227 yesterday. Above 150, the positive traction is high and a market positive for any rally.
2. The second observation, is that New Highs had a peak level on November 5th. And since then, the trend has been moving down. Unless this trend changes, it will eventually bring the level of New Highs down below 100, and possibly below 50.
Why are those numbers important? Because we want to see New Highs above 100 for a healthy rally, and below 50 is a problem level typically associated with pullbacks or market corrections.
So, the declining trend has been a slow descent, but its message is that it wouldn't hurt to put the NYSE New Highs on your radar screen during the coming weeks.
(FYI: Today's chart is posted and updated every day on our Standard subscriber site and can be found on Section 4, Chart number 4.)