Collapsing New – 52 – Week Highs

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.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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