NYHL NYSE New Highs-New Lows Weekly Chart

The new highs and new lows continue to show the bull party in progress with healthy new highs occurring day after day. However, since the market top last September-October, the NYHL is diverging from the SPX.  The broad markets are punching out new price highs each day but the NYHL shows the new highs decreasing.  Looking back at 2011-2012, the green lines for the indicators show the long and strong profiles that want to see higher highs ahead, even through the September high. As 2013 began, the NYHL did explode higher with many new highs printing for stocks and the NYHL levels printing near the September top which satisfies the desire of the long and strong profiles for the MACD in 2012. The purple lines show less enthusiastic indicators moving forward, leaking lower off of overbot levels. The NYHL over the last couple weeks have not taken out  the NYHL levels from January, so negative divergence cannot exist, but if you call the current NYHL highs close enough for government work as compared to January, the purple lines show negative divergence expecting less highs and more lows ahead.

The red circles show the major market bottoms over the last couple years where the new lows were coming on strong, as is expected as the broad indexes sell off. The bears have been jipped since the 2011 weakness. The lows barely dominate in the summer of 2012, when Draghi pledged support for the euro and the Fed hinted at QE3 Infinity.  The Fed money pumping creates all the market rallies, from Fall 2011 to early 2012. Then the rally from summer 2012 to September-October 2012. Then the November bottom when markets realized QE4 Infinity and Beyond was on the way, which would replace Operation Twist with outright purchases, and Chairman Bernanke provided this news in mid-December. So the bulls continue the fun into this month continuing the rally from the mid November bottom.

The NYHL chart is currently searching for a top right now.  Note how the major lows occur at from three to five month intervals (red circles).  November was the last low, four months ago. Projection is for a market top to occur over the coming days or week or two.  Time will tell if that leads to a significant market drop, or, if a recovery move will occur again and then a more significant roll over.  The average cyclical bull market runs about 30 months. The 2003-2007 rally was special since it lasted 4 1/2 years, way over the typical rally period expected.  This rally started March 2009 and is now four years old, one and one-half year past the average rally expected and approaching the prior bull rally duration which was one of the longest in history. Interesting times. The Fed is the third man on the field these days. 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.