The chart above tracks the number of NYSE, NASDAQ, and ASE stocks making fresh 20-day highs minus the number making new 20-day lows (red line).
Note that new highs peaked in late July in what appears to be a momentum high. At the recent price highs (SPY; blue line), we are seeing fewer stocks participating in the new highs. If this candidate transition pattern holds, we should eventually take out the August lows in SPY. (Note: I follow this and other indicators each morning before the market open via Twitter; follow/subscribe here).
Relevant Posts:
Trading Transition Patterns
Why I'm a Nervous Bull
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Trading Transition Patterns
Why I'm a Nervous Bull
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