In the later stage of stock bull markets there’s usually a deterioration of stocks making new – 52 – week highs. At some point there are not enough stocks making new highs and the overall stock market goes into an intermediate degree correction or a bear market.
The daily chart of NYSE New – 52 – Week Highs ($NYHGH) courtesy of StockCharts.com illustrates the history of new -52 – week highs since the start of 2021.
Today 06/28/21 the S&P 500 (SPX) made a new all-time high. The number of stocks on the NYSE is down about 80% since the high point in 2021.
The daily chart of Nasdaq New – 52 – Week highs ($NAHGH) shows what’s been happening since the beginning of 2021.
Today 06/28/21 the Nasdaq Composite (IXIC) made a new all-time high.
The number of new highs has fallen about 70%.
Two of the three main US stock indices – SPX and IXIC made new all-time highs and is a bullish “rule of the majority signal”. This implies the bull market could continue for at least one -trading day.
Daily VIX made another higher bottom vs. a new SPX high – a bearish sentiment signal.
Today the SPX moved above 4290.00 triggering a stop loss on 50% of a short position initiated at the open of the 06/21/21 session. The percentage move from 06/21/21 was 2.8% the loss on 50% of the position was 1.4%. Continue holding 50% short with a stop loss on a move above SPX 4310.00.
At some point there won’t be enough stocks making new highs to maintain the bull market. That point could come soon.