That is not the way I see it: Look at this yearly chart of the new lows:
stockcharts.com[l,a]dallynay[dd][pf]&pref=G
Note that in the February decline we topped at 95 new lows (and the price was only some 45 naz points lower than we are now), while now we are topping in the 60/70 area.
Similarly, look at the new highs:
stockcharts.com[l,a]dallynay[dd][pf]&pref=G
In January, when the market made its local top, we reached a new highs high of 145, while here, a solid 350 Naz points under that we have almost 200 new highs, much more than at the January top. Mind you, this by itself is not enough to determine where we are in the "bull/bear" cycle. Last June we had more new highs at a lower low in the market and getting set up for the August/September massacre, yet, those whipsawing moves were excellent for traders. The inkling that something was not kosher (and one of the reasons for my arguments with Larry at the time) was that on rallies, new lows were not contracting relative to prior rallies, as we have now (thus, partially, my sticking with a major decline in the late May/June time window). All I am saying here, is that excessive bearishness in view of expansion of new highs and contraction of new lows is not warranted yet. Some short term bearishness, yes, but I still think we will have few tepid moves up from within 50 points (Naz) under where we closed.
Zeev |
