NYHL NYSE New Highs-New Lows Weekly Chart

In a robust and strong stock market, you want to see a broad-based rally since that has staying power and long legs. The green upward-sloping channel verifies the upside party in stocks after the August 2011 waterfall crash. As stocks made new highs, more individual stocks were printing new highs verifying broad market strength. Now, not so much.

The red channel shows the consistent lower lows and lower highs in the NYHL going forward. This signals that fewer and fewer stocks are making new highs. Since the stock indexes remain near record highs, these stocks are obviously propping up the market. The concept is verified by the wild upside party in tech stocks a couple weeks ago including AAPL, FB, AMZN, NFLX, GOOGL. The lock was broken open on the liquor cabinet door at the NYSE so traders could celebrate the never-ending bull market fueled by central banker Keynesianism.

The problem with fewer stocks leading the gains in the indexes is that when these stocks pull back the shock to the broad indexes to the downside can become very dramatic. Less new highs and more new lows in the stock market indicate trouble ahead for equities. 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.