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Technology Stocks : Semi Equipment Analysis

SOXX 297.50

-2.6%

Nov 6 4:00 PM EST

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From: Return to Sender	8/18/2013 4:49:31 PM
	5 Recommendations Read Replies (8) of 95378

Market Breadth is Poor at Market Tops - For years I have been searching for the Holy Grail of Clarity where it concerns helping to determine when an actual market top is forming. After reading this article recently I think perhaps I may have finally found some help in that area: financialsense.com Help that I would like to share in the form of some charts. I have always known that market breadth gets poorer as the market gets closer to a market top but I never knew just how much poorer? Would you believe that on average only 6% of the stocks on the DJIA have been hitting new highs at each of the last 14 major tops since 1929? According to the article linked above this is true. I see no reason to disbelieve it. After all everything you read on the Internet is true but then of course I am also a "French Model". LOL So anyway while I cannot show you charts from every major top since 1929 I can show you how many New Highs and New Lows were seen at the tops in 2000 and 2007. Once you look those charts over it's probably a great idea to ask yourself how do our charts compare to that today or at the most recent highs for the DJIA and Nasdaq? The 2000 Top Compared to Today - In 2000 at the Major Market Top there were approximately 119 New Highs on the NYSE in January and 352 New Highs on the Nasdaq at its March highs: Now The 2007 Top - In 2007 at the October Major Market Top there were approximately 201 (344 one day later on a slightly lower high) New Highs on the NYSE and 121 New Highs on the Nasdaq. These numbers were actually higher before and after the tops formed so this is not going to be the perfect indicator either: Now The other interesting occurrence is that at the same time the market makes a Major Market Top the number of New Lows in the market is a lot higher than most people would suspect. This is when the Hindenburg Omen has its most useful sighting. All other sightings when there are still numerous New Highs will generally precede nothing more than normal pullbacks in the market rather than an impending Bear Market. How many New Lows were there at the 2000 Top compared to Today? In 2000 we had approximately 61 New Lows on the NYSE and 118 New Lows on the Nasdaq when the market put in its Major Market Tops: Now How about the 2007 Top? At that time the number of New Lows was expanding but not so much that anyone might have assumed we were forming a top except for the lower number of New Highs seen in the charts above. The one thing we did see before these tops was numerous Hindenburg Omen sightings while there were a much lower number of New Highs in the market: Now Some longer term perspective: At this time all I can conclude is that while this exercise of the past few hours can tell me what I already knew it's still not an absolute science calling a market top. RtS

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