"The following chart shows cumulative sum of the difference between new 52 week high and new 52 week lows of Nasdaq stocks. This chart is essentially none other than my Primary Breadth Trend analysis. It detects medium term trend in the stock market."Next, we have The Patient Fisherman, discussing the same New High/New Low index but with a 10 day EMA. The Fisherman stated:
"By following this indicator you can move into the market as stocks begin their next move up. Catching stocks as they move out of a correction offers the lowest risk to highest reward entry point. ...For the working person this is an easy to use indicator allowing you to move into the market during the bull phases and get you out before significant corrections."In a sense this is similar to the all NYSE ($NYHL) discussed by Chris Perruna that I update each week in the "What Others are Saying" section, but I've been posting the All US New High - New Low Index for a broader view of the market.
Below, I've added pictures of all three Indices ($NAHL, $NYHL, $USHL) as cumulative plots with their 10 day EMAs. I'll be adding these to the "What Others are Saying" section and removing the current area plot of the ($USHL), because I think the cumulative plots are much easier to read. It's interesting to note that the $NAHL gives a bit better/quicker signals (i.e. more definitive June sell signal) than the other two broader indices and seems to be a better medium term indicator versus the SP-500. You may want to experiment with these plots by looking over a longer period of time.
Click to Enlarge Plots
|Nasdaq New High - New Low for December 20, 2011|
|NYSE New High - New Low for December 20, 2011|
|All US New High - New Low for December 20, 2011|