Typically nosotros come across five-day highs wane in addition to five-day lows expand every bit marketplace cycles transcend out. We besides stimulate got been seeing five-day lows crescendo ahead of wheel cost lows.
Yesterday, nosotros shut modestly higher inward SPX, only novel lows expanded in addition to novel highs contracted. Rob Hanna of the insightful Quantifiable Edges service of late issued a inquiry report that noticed downside tendencies when the marketplace rises only the proportion of rising stocks falls brusque of 40%.
Price activeness during the electrical flow marketplace wheel has been somewhat distorted, only I'm viewing the electrical flow wheel every bit having begun alongside the mid-December lows, having peaked at the belatedly Dec highs, in addition to straightaway inward a downwardly phase. If that is the case, nosotros should come across at to the lowest degree i farther downwardly leg to the marketplace that would accept us below those Dec lows. H5N1 dramatic expansion of novel highs would contradict that scenario. Tracking short-term strength/weakness via novel highs/lows on a daily in addition to several solar daytime dry reason is a useful means of determining if markets are strengthening or weakening going forward.
Further Reading: A Look at Market Cycles
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