Our new high indicators are now at their lowest levels in 25 trading days. We are looking for signs now of a resumption of a bull leg up. I have noted today on the NH chart the 3 leg pullback that occurred around the middle of June. I am not an Elliot Wave guy so my A,B,C annotation are my own for reference between the Zweig Breadth and the New Highs.
Here is our current Zweig panel with the A,B and C legs indicated. Note that already the Zweig Breadth indicator has pulled back to the “A” level so a snap back from even here could easily occur.
Today looks to gap up on the open. This is what we did on the 2nd red bar of the “A” leg on June 16 which ended up closing considerably lower. We need to watch today’s gap for closing and a test of the lows today to establish our position in the current pullback.
Today’s NH’s magic numbers to turn momentum are 52 and 62 respectively. We should be able to judge this gap based on early New High numbers today, say around 10 am this morning. If we hit 20 new highs in the first 30 minutes it could signal a turning.
happy trading
-rlt
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