Eliades has pointed out that more new highs than new
lows has provided a top recently, I am not certain it
will work this time, Many stocks are firming up when
I look at individual charts, it does appear it will come
down to the numbers tomorrow.
there were more 52 week highs than 52 week lows. A technician who
was unaware of the recent history of this technical indicator might look
upon today's reading as a positive sign. But we have made the point
several times over the past few
months that for many months now, whenever 52 week highs outnumbered 52 week
lows the market has been either at or very close to a top. Let's review
some of the recent history since August 1999. There have been precious few
days over the past nine
or 10 months when 52 week highs outnumbered 52 week lows. August 23rd,
1999-A top came one day later, September 10th-the exact day of a secondary
top, October 29th-marked the exact closing high for the next two weeks,
November 4th and 5 and November
16th-this was the only period over the past eight months when the market
still had a significant distance left in its rally, December 31st-exact top
prior to a 500 point decline, January 7th, January 10th, 13th, 14th, 18th,
19th -those days led up
to and followed the Dow's all time high on January 14th, February 8th-an
immediate decline of greater than 1000 points, March 17th through April
12th-there were 13 days in this period when 52 week highs outnumbered 52
week lows, but from March 17th
to the top on April 12th there was only a 6.5% gain, April 26th- one day
away from a top, most recently April 28th to May 16th-over this period the
Dow went nowhere and topped on May 16th, move and finally today, May 31st.
As you can see from the
record of the past eight to nine months, when 52 week highs have
outnumbered 52 week lows, more often than not it has indicated a topping
pattern. |
