Bill
here's a perfect example of what i was talking about!!!!.. 03/23/99
Choose an Archived Report
Reversal Down In the Nyse High-Low Index
Our short term indicators recently reversed up from below the 30% level, giving short term buy signals.
We went long "for the short term as it might turn into the long term", using stop losses in case the
market did not follow through. Since those buy signals by the High-Low and the Percent Above 10
Week, the Dow Industrials has again rallied to new all-time highs, moving briefly above the 10,000 level
for the first time, and made a number of new closing highs. However, once again the NYSE Bullish
Percent has remained in a column of O's and in Bear Confirmed mode. The current reading is 41.84%.
The Optionable Bullish Percent never reversed up nor did the NYSE Bullish Percent. Despite the Dow
Jones moving to a new high and over 10,000 there were never 6% more buy signals than sell signals to
reverse the main coach up into a column of X's. Therefore this long term indicator remains with the
defensive team on the field. Some of the other negatives we see include the fact the narr owness of
the rally, certainly obvious in the fact most of the indicators couldn't gain much sponsorship. The
Advance-Decline line continues to move lower and points out again the narrowness of the market.
Remember, we play the short term (with stop losses) in case it turns into the long term. The stop losses
should keep you from big losses, raising more cash as any stocks hit their respective stops. The point is
to be prudent. If you do initiate long positions from here, make sure you have stop losses on those
positions in case the market does head lower.
We see a lot of similarities in the indicators now to July 1998. Recall that in June of 1998, our short
term indicators reversed to the upside from below the 30% level, giving short term buy signals. These
buy signals saw the High-Low Index and the Percent of Stocks Above Their 10 Week Moving
Average Lines move above the 50% level with the High-Low actually rising in July 1998 all the way to
64%. While these short term signals led to a move to new all-time highs in the Dow Industrials in July
1998, it did not see enough buy signals on NYSE stocks to cause the NYSE Bullish Percent to reverse
into a column of X's. It remained in a column of O's and in Bear Confirmed status despite the rally in
the Dow. That rally was very narrow and most people did not see their accounts rise in value. The
NYSE High-Low Index reversed to the downside on July 22nd 1998, falling below 58%. From there
the High-Low declined below 10%, an area it had not seen since December 1994. Just for your
informat ion, the close on the Dow Industrials on July 22 of last year when the High-Low reversed
back into a column of O's was 9128.91. By August 31st, the Dow had fallen approximately 1590 points
or 17.4%. The August 31st close was the closing low in the Dow from the July top.
This reversal does not mean that the market will do what it did last July and August and fall
dramatically. It may not. Maybe it rises from here. However, we wanted you to be aware of what was
taking place in this important short term indicator. To access the chart of the NYSE High-Low Index
type in the symbol HILO.
While we make every effort to be free of errors in the data on our site,
it is derived from data from other sources. We believe these sources to
be reliable but we cannot guarantee their accuracy.
Copyright © 1995-1999 Dorsey, Wright & Associates, Inc.
Disc |
