Remember that sentiment indicator? I have not used it in a while since we really were not getting any 52 week new highs, but this rally is turning that around and twice in this rally we had new highs greater then 100. That has not happened since last fall.
In the traders room we have been tracking the new highs intraday looking for the 5 day moving average (the yellow line) to pivot or turn down. Each day I have been publishing the “Magic number” that will break the rising 5 day. Today’s number is 60. If we close below 60 new highs today the yellow line will break lower showing some slowing in this latest bull market run.
A technical note: Some have pointed out that the TradeStation new highs symbol ($52WHN) does not line up with other published NYSE new highs. Yes this is correct. There is no standard calculation or publishing of NYSE new highs. If you look at the raw NYSE new highs yesterday there were hundreds of new highs. Many companies have multiple symbols, all those warrants and different series that make new highs at the same time and there are some symbols that are illiquid, so each vendor that produces a New High symbol is on their own to filter down to the core. Hence the differences. I can only historically recall the TradeStation data so that is what I use.
It is not necessarily a great leading indicator, but it does give us another picture of the momentum and strength of the current run and gives us confidence to continue in our longs. So today we look for 60. As a rough intraday model we should be above 20 by 9:45 and more than half-way there, so above 30, by 10:30 am this morning to continue the new high momentum.
Check out the members-only website. In the trader’s corner I will try and update the running number and a close prediction throughout the day and of course in the live traders all day, or upon request.
As always if you have difficulty logging in of if you are having any technical issues email me: redliontrader@gmail.com or IM me in PalTalk or AIM or GTalk all as redliontrader.
happy trading
-rlt
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