Do you remember our postings on July 29th, and August 3rd.?
The title was "Is it time to be Concerned?"
Based on our analysis of the NYSE New Highs, the answer was yes.
Last week's comments: For starters, we had made these comments about important levels to watch:
- A minimum of 100 is a very important level in a rally.
- 150 is a stronger level that you want to see.
- Below 50 ... start to be concerned.
- Below 25 is very unhealthy and a dangerous market condition.
If you have been following the level of New Highs, you know that they are very low now and understandably so. Yesterday's level of 3 New Highs was a "very unhealthy and dangerous market condition".
*** Since last week, the market has reached some very oversold levels with an increase in Institutional buying which could support a "short covering" rally in the short term.
However, Institutional Investors are still in Net Distribution, so investors should continue to heed the comments of the past two weeks: "be concerned until the market shows you better proof about safety levels."
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