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Twenty Day New Highs vs. New Lows are used as a short term indicator by some analysts ...

Most investors look at yearly New Highs and don't look at lesser time periods. (The one year New Highs on the New York Stock Exchange has had a paltry 1 stock reading in the past few days.)

For an indication of shorter term health conditions, some analysts look at the number of 20 day New Highs and New Lows ... so that is what we will do this morning.

The data below shows the 20 day New Lows compared to the New Highs for this week on the NYSE. This indicator is used by short term traders and not longer term traders.

Monday through Wednesday showed that New Lows exceeded the number of New Highs on each day. The most important number is the ratio between each group.

Here are the ratios for Monday through Wednesday:
Monday: New Lows exceeded New Highs by 2.46 to 1.
Tuesday: New Lows exceeded New Highs by 1.19 to 1.
Wednesday: New Lows exceeded New Highs by 13.18 to 1.

Some short term traders/investors are thinking that stocks are cheap now and want to buy for that reason. Until the ratios start to favor the number of 20 day New Highs, downside pressure will remain in the market.

 

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