NYSE New Highs Finally Increased. We'll Take It.
The figure remains under the peak readings from a year ago, but all right.
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I promised you that one day I would be able to report that the indicators changed, and today I can report we had one or two change.
I am a bit surprised more didn’t change, but there is still a lot of sloshing around.
Let’s start with breadth. You know it’s been making new highs since we discussed that last week and again on Monday.
But what changed is that the McClellan Summation Index for Nasdaq, where I use volume, finally stopped going down, and you need a high-powered microscope to see that it hooked up just a tiny little bit. This is the first uptick in this indicator since mid-July.
Does that mean that the calls for seasonality actually worked? Because this indicator says the majority of stocks have spent the past two months either heading down or going nowhere.
Let’s look at two charts from stocks that were so hot going into July and did in fact spend the past two months in correction mode.
We’ll start with Coinbase COIN. Look at the peak in mid-July. The stock is nowhere near it now, but notice how it has spent the past two months in a correction. It hasn’t moved much but it ought to fill that gap over time, shouldn’t it?
Remember when Rocket Lab RKLB was going up every day? But look at it since July: It peaked and corrected more than 20% in that time and is still under the early September high. But again, this is the type of action we’ve seen in a lot of stocks these past few months. It still needs to crack over 50 to convince us that it is finished with the correction.
Let me note that the NYSE McClellan Summation Index still hasn’t changed from its sideways position. But the number of stocks making new highs finally increased. Sure, it remains under the peak readings from a year ago, but an increase is an increase.
As for the charts themselves, you can see from the two above (and I have a lot of these) that they really haven’t gone anywhere, even during Thursday’s rally. As I noted, RKLB is still under last week’s highs and COIN is still under the mid-August highs. But the point is that they are more prepared to lift now, having done some work.
You might have noticed that the stocks that were up quite a bit on Wednesday took the day off on Thursday. That means not much has changed in the Either/Or Market. If the megacap names lift, all these others will probably sit it out. And vice versa.
The other indicator that changed was the Daily Sentiment Index. The S&P's is now 82 and Nasdaq’s is 81, so if we get any follow-through in the next few days, these might step back over 85, which would mean we’ve gotten to giddy. Oh, and the VIX’s DSI is 16 so it won’t take much to get it under 15.
