Friday, March 26, 2010
Divergences in New Highs and Lows
Note the deterioration in new 20-day highs minus lows in the last two weeks (pink line above), even as the S&P 500 Index (blue line) has been making bull market highs.
I noted earlier that there were significant divergences occurring within and across stock markets. Those are showing up in the new high/low figures.
At this juncture, we're not yet seeing a significant expansion of stocks registering fresh 20-day lows. Rather, we're seeing a narrowing of the rally, such that fewer stocks are making new highs.
An expansion of lows would suggest a more serious potential breakdown of the market uptrend.