NYHL New Highs-New Lows Weekly Chart

The trend in the NYHL with less new highs continues over the last few years. In a healthy stock market you want broad-based participation pushing all boats higher signaling strength across the board; the opposite is happening. For example, the Nasdaq is simply pushed higher due to the strength in AAPL and MSFT. Fewer and fewer stocks are making new highs and the upside is driven by market heavyweights.

After the initial QE 1 money pump in early 2009, stocks ran strongly higher verified by higher highs in the NYHL. After 2010, however, the trend is less new highs as the stock market prints all-time highs. The spurts in the NYHL over the last couple years are due to the central bankers goosing the economic system. The BOJ's bludgeoning of the yen last year created the +30% rally in US stocks for 2013.

The NYHL behavior is also verified with the NYAD advance-decline line with less advancers than decliners occurring as equities print higher highs. The NYAD peaked in 2011. If the heavy weights such as AAPL and MSFT roll over there is nothing there to support the indexes. Both AAPL and MSFT weekly and daily charts are negatively diverging although the recent momo creates more momo. The expectation would be for both to top out and roll over this month moving into December. 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.