SPCFD:SPX   S&P 500 Index
The lack of market volatility stresses the market bears.

Trading View does not offer the Elder weekly NH-NL, so I modified with what is offered. In this chart we have the NYSE weekly new lows and highs compared to the S&P 500 Index . Currently the NYSE HIGN is at 246, which is near an overbought signal. My line in the sand is HIGN 300 for an overbought market condition and 450 extremely overbought. The HIGN peaks are also relative to when the last correction took place (higher LOWN numbers). However, the NYSE weekly low has only recently been hovering the (green area) near 0 line for three months and coming off a small market sell off in November. For this reason I believe the market is still in a bullish phase, but for not much longer before a sell-off takes place. If the NYSE ( HIGN ) does present a much higher number then the sell-off will be much greater, i.e. take a look before 2010 flash crash or summer of 2004 bear market correction (relative to a prior period of extremely low volatility March 2003 - February 2004).

May 23, 2010 at 10:47 AM | written by Alexander Elder

My approach to tense situations is to push back a bit, look at the big picture, and then return to shorter-term charts for making tactical decisions. I am a huge fan of the New High – New Low Index and invite you to take a look at its signals with me. Let us review the weekly chart of the previous bull market and apply those signals to current events.

A bull market typically has three stages, clearly marked on this chart. If this is right, how will the weekly NH-NL mark the bottom? If it follows the model of the previous bull market.

We expect menacing price action to continue and the feeling of mass pessimism to darken in the weeks ahead.

A combination of technical analysis , experience, and discipline provides the tools for understanding the markets and succeeding in them. We share our research, including the analysis of NH-NL at http://www.spiketrade.com


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Compared with the VIX - Volatility Index
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Monthly NYSE NH-NL compared to the S&P
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QuantitativeExhaustion QuantitativeExhaustion
Monthly NYSE NH readings (246) are near 2010 flash crash (310) and 2011 U.S. Debt Ceiling/Rating Cut (312) fiasco.
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The HIGN peaks are also relative to when the last correction,
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That would be true.
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Might have the count wrong... I think the flash crash was still part of 1