You know that we monitor and analyze the action of many indicators relative to health and strength of the stock market.

One of the indicators we monitor is the level of New Highs on the New York Stock Exchange. We analyze the New Highs on short term and long term models.

The long term analysis is a "trending" analysis of the improvement or deterioration of stocks on the New York Stock Exchange. Our long term New Highs trending chart is below.

During strong Bull markets, this long term trending indicator reaches levels over 150. When bullishness worth paying attention starts to develop, the indicator reaches 50 and moves up from there.

So, as of the close yesterday, where were we?

Yesterday, we were not at the 50 level, in fact, we were only at 34.7. That is not necessarily a negative, because of the change in the trend since last September. The indicator dropped sharply since last September and it has remained well below 50 since then.

However, something started to happen in May. Towards the end of May, the indicator started to move up. It made a higher/high followed by a higher/low. It then made another higher/high and higher/low. That is the definition of an up trend.

Yesterday, it made another higher/high, so although we are not at a level of 50 yet, we are seeing strong trending that is taking us closer and closer.