Last week, we posted an analysis of the NYSE's daily New Highs. Let's continue that exploration from a different angle so we can see the long term and short term picture of the story it is trying to tell.
For starters, we had made these comments about important levels to watch last week:
- 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.
At what level were the New Highs yesterday? They came in at 41 ... so you should be concerned.
Just scan this chart for a moment ... you don't have to be a technician to understand it. Note how the market performed when the New Highs were below 100, below 50, and then below 25.
As you can see, below 50 is NOT a good place to be unless the New Highs are starting to trend up higher ... and then, below 25 is can wipe out your savings.
Congress is busy fighting, excessive debt is a concern for foreign countries and the U.S., and the 30 year Bond Yield is approaching a critical resistance that will test its 15 year down trend.
If you are still acting bullish, or clinging to optimistic ideas that is good ... however, please give some consideration of the story that the NYSE's New Lows are trying to tell right now ... be concerned until the market shows you better proof about safety levels.
