What the Level of New Lows Can Tell You About the Market

By: Marty Chenard | Wed, May 25, 2011
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A Moment of Respect ...

Last night, Mark Haines of CNBC died unexpectedly after 22 years of service. At this time, we would like to extend our condolences to Mark's family and friends.


For today's update, we will look at the NYSE's New Lows.

If you think about it, when New Lows continue to increase day after day, then investors are bailing out of their stocks in despair.

The worse of the 2008 and 2009 Bear market drops occurred when the NYSE's New Lows were ABOVE 50 per day. A quick look at today's chart, and you will see that to be the case.

Is there a "gray area" where the New Lows depict a condition where the market will pull back or correct?

The answer is yes, and that value is in between 28 and 50. When the New Lows are in that range, the market is under pressure as investors are taking profits, moving out of certain sectors, or reducing exposure.

What could be considered a Bullish level?

Any daily number under 28 should be considered bullish, and the safest and strongest market moves generally have New Lows below a daily reading of 10.

Obviously, this indicator is more useful in conjunction with other market data, but even by itself ... the New Lows gives you a good indication of what the currently investor behavior is.


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Marty Chenard

Author: Marty Chenard

Marty Chenard
Asheville, NC 28805
Tel: 828-296-1200

Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL. He is an advanced technical analyst and not an investment advisor, nor a securities broker.

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