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Market Reversal? View the NH-NL Ratio

March 7, 2011 by 12 Comments

Is the market topping? Is it setting up for a reversal?

Let’s ask the NH-NL ratio, considering it has been “spot on” for every major market reversal as far back as the data started to be gathered (decades). Until the NH-NL ratio reverses, don’t consider any reversal sustainable: history speaks for itself.

Watch the NH-NL daily and weekly readings, the entire story will be told here (NO other indicator is necessary).

Filed Under: NH-NL Ratio

Comments

  1. Jack Damn says
    March 8, 2011 at 2:49 pm

    Good stuff Chris. I too look at the NH-NL charts every weekend.

    FYI … StockCharts.com recently added them to their site. They’re calculated correctly I believe. They put them in when they were working with Dr. Elder.

    ► http://stockcharts.com/h-sc/ui?s=$USHL&p=D&yr=1&mn=0&dy=0&id=p87481728355 ($USHL daily NH-NL)

    ► http://stockcharts.com/h-sc/ui?s=$USHL5&p=D&yr=1&mn=0&dy=0&id=p26665144281 ($USHL5 weekly NH-NL)

    As with you, I highly recommend everyone study these. Best indicator there is for tops & bottoms.

    Cheers.

    /Jd

  2. Chris says
    March 8, 2011 at 3:35 pm

    Jack,

    I have been waiting a long time for stockcharts to post these. I’ll take a look and verify the info. Thanks for the heads-up.

  3. Gary says
    March 8, 2011 at 8:22 pm

    pull out etf bond funds etc and other weird etf to get equity on NHNL

  4. Bill says
    March 8, 2011 at 9:55 pm

    Looks interesting. How is a new high or a new low defined ? New all time high ? 52 week high ?

    Also, am I correct is stating that this is not really a ratio, but a difference ? i.e number of new highs – number of new lows.

  5. Wim says
    March 9, 2011 at 7:36 am

    Chris,

    What data source do you use and do you clean the data (removing pref shares/ CEF’s)? I tried to replicate your charts based on bloomberg data and it tends to differ materially from time to time. Fe. while i get a -20 low end of august 2010 for the 10d MA you have a 50 low for the same period.

    Kind regards,
    Wim

  6. Patonet says
    March 9, 2011 at 2:35 pm

    Great article!!!. Somebody knows how plot this charts on ThinkorSwim or Ninja Trader? Thanks for your help.

  7. Chris says
    March 9, 2011 at 7:28 pm

    Wim,

    I use Pinnacle data.

  8. Chris says
    March 9, 2011 at 7:30 pm

    Bill,

    52 week high or low is the criteria. Yes, correct terminology is a 10-day diff.

  9. Janet says
    March 10, 2011 at 4:07 pm

    I looked at both charts at stockcharts…can someone explain to me how to interpret them?? Thanks…

  10. Jamie says
    March 10, 2011 at 4:21 pm

    Chris

    Does the positive H-L that chats show mean that today’s dip below 1300 on SPX is something we’ll bounce up off of?

Trackbacks

  1. chrisperruna.com » Blog Archive » Market Distribution and Trend Reversals says:
    March 13, 2011 at 6:17 am

    […] mentioned in a previous post, Market Reversal? View the NH-NL Ratio, the NH-NL ratio is the strongest secondary indicator on the market for a major trend reversal. The […]

  2. Daily Post says:
    March 14, 2011 at 11:01 am

    […] Market Reversal? View the NH-NL Ratio […]

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