NYHL New Highs-New Lows Daily Chart

Extreme positions identify market tops and bottoms although the NYHL is sometimes more art than technical analysis.  The August 2011 waterfall crash resulted in an uber low number that provided a market pop and then the market bottom occurred in October 2011 as Operation Twist and promises of an ECB plan bounced markets. November 2011 was a short-term top, then roll over again but the ECB announced LTRO1 with 2 on the way so the green circle at Thanksgiving 2011 identified the market bottom.  This year the tops were identified in the spring with readings at 300-ish or higher.  The June bottom that started this ongoing rally was identified with the low -100-ish print.

Now we look at last week, a wild upside orgy, the lock on the liquor cabinet was broken open and a wild party broke out for the bulls which ended the week with lamp shades on heads and the NYHL printing an obscene near 900 print. Everything was moving up and money kept moving into the pumped up stocks pumping them higher and creating higher price highs. The extreme points mark inflections so hang on to your hat.  Volatility and volume should be on the increase so the intraday market moves should become more violent moving forward. Markets may sell off in the near term, but another pop to these elevated NYHL levels may be on tap. Over the coming weeks, however, the high reading now is more favorable to the bears moving forward. In general, the NYHL over 250 signals a market top at hand while readings under -100 signal market bottoms at hand. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.