I am once again focusing my energy on the New High New Low (NH/NL) data as it is historically the most accurate indicator in the market. No indicator is as valuable as this tool. What I have done today is charted the 10-d/30-d MA Diff to show you a major crossover that occurred in March 2009. The exact date of the crossover was March 18, 2009; the NASDAQ is actually up more than 26% since that day. Not a bad trading strategy but I will admit it’s not one that comes around often. The second and third charts show the NH/NL differential and the NH/NL 10-d ma diff.
As I said in the post NH NL Picks Market Tops and Bottoms:
Consistent Nasdaq readings above 100-200+ will be the official confirmation to grab and add shares for trend traders!
That’s what I am looking for! Until that happens, a “true” up-trend is not sustainable. The up and down whipsawing of the past several month is what we can continue to expect until we see consistent readings in the triple digits.
Any reason for choosing a 10 day and 30 day moving average for the first chart?
Hi Chris,
How you get the graphs for NH/NL data? Is there a website where is possible to see such graphs or you collect the data every day and then create a graph by yourself?
If you collect the data every day where you get the data?
I would like to study this tool in more detail but I need data 🙂
Tnx
Hi Chris,
Thank you for all you work on this blog.
I also have been making a daily log of the new highs-new lows and plotting them on a daily graph. This is my first year doing this but I know you have done this for many years. Throughout this rally I have noticed that while the difference is expanding, the quality has been less than stellar. For example, last Friday there were 131 new highs to 11 new lows, but only 38 of these new highs were above 20 dollars. In your experience, have you noticed these cheap speculative issues taking off first only then to see real leadership come in later, or does leadership usually start from the beginning.
Also, do you only plot the new highs-new lows only on the Nasdaq? I have been using the overall numbers given in IBD.
Thank you for your response.
Jason,
I read about it in a few books so I adopted the strategy once I realized it worked.
Kresimir,
I get my data from pinnacle data and then chart it in Microsoft excel, I keep it very simple. I can’t find these charts anywhere on the web. Decisionpoint.com has the NH/NL ratio data in chart form but that’s about it.
I chart NAS and DOW for NH/NL ratios.
Felix,
I look for the “true” leadership to take the lead from the start, stocks above $10 per share with a few other requirements (market cap, earnings, etc.).
Hi Chris, just wanted to thank you for a great web site, and I look forward to following you on twitter.
Cheers
I noticed you didn’t address the divergence, or the *fluttering* between the 10 and30 from May to date. Why? Do you discount this divergence or shouldn’t it be something to keep an eye on as a possible sign of a reversal coming?
Jason,
Read “The Nature of Risk” by Justin Mamis to understand the NH/NL.
I use tradestation, and they provide the following indices…
$52WHN NYSE New 52-Week Highs
$52WLN NYSE New 52-Week Lows
$52WHA AMEX New 52-Week Highs
$52WLA AMEX New 52-Week Lows
$52WHQ NASDAQ New 52-Week Highs
$52WLQ NASDAQ New 52-Week Lows
$52WHI Dow 30 New 52-Week Highs
$52WLI Dow 30 New 52-Week Lows
$52WHND NASDAQ 100 New 52-Week Highs
$52WLND NASDAQ 100 New 52-Week Lows
$52WHSP S&P 500 New 52-Week Highs
$52WLSP S&P 500 New 52-Week Lows
$52WHRL Russell 2000 New 52-Week Highs
$52WLRL Russell 2000 New 52-Week Lows
$52WHUS All US New 52-Week Highs
$52WLUS All US New 52-Week Lows
I plotted the net of the last two against the trin on the ES, and was very impressed with this as a leading indicator!!