New High Numbers Resume Gain in June... Rally Beast Seems to be Tiring

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Positive 52-Week New Highs vs. New Lows streak enters month 34!

Another useful tool for analyzing an index which only includes your kind of equities is a comparison between the number of issues establishing new 52-week high ground and the number sinking to new 52-week lows. The longer the numbers are overwhelmingly positive, the more likely it is that a correction is approaching.

Superficial analysis is very straight forward --- there should be more new highs in an upward trending market and more new lows during a correction. Typically, New Highs vs. New Lows is the last market statistic to weaken...

  • Over the past 63 months (April '09 thru June '14), months with more new highs (59) have exceeded months with more new lows (4) by a huge margin (see chart) --- including the past thirty-three in a row; 44 of the past 46. 
  • How many of you think this is going to last forever... please, I want to hear from you.
  • Does your 401K Plan take your equity profits automatically?

 New High vs. New Low Numbers Still @ Stock Market "Bubble" Levels

 Has your equity manager taken profits during this tremendous upsurge in the IGVSI market?

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The New High and New Low issue stats also identify weaker and/or stronger sectors within the Investment Grade Value Stock selection universe --- very important in helping investors determine where the bargains are and where the profit taking opportunities should be.

New High vs. New Low numbers are around histerical, "Bubble" levels --- markets this strong don't continue forever --- have you taken your profits? 

Remember to be quick on your profit-taking feet, using the two 7's beats one 10 "Brainwashing Book" strategy.  The correction you've anticipated may without warning --- there has never, not ever, been a permanent upward only stock (or bond) market.

What's this all about? Check your copy of "Brainwashing" or contact the only authorized Market Cycle Investment Management practitioner on the planet --- yes, there is only one, and this guy can put you in touch...

 

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Associated Content:
Six Year $100K Portfolio Performance Numbers - The IGVSI is a barometer of a small but elite sector of the stock market called Investment Grade Val...
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Market Breadth Stronger - MCIM Portfolios Strike New Highs - IGVSI breadth statistics signal changes in direction within Investment Grade Value Stocks only --- a...
Bargain Stock Monitor Remains Stuck in Rally Mode - The fewer IGVSI equities at bargain prices, the stronger the market and the more Smart Cash that sho...
401k Plans Are Retirement Programs - NOT - So long as we are in an environment where retirement plan income (and principal in the case of all p...
Modern Portfolio Theory --- The Root Of All Evil - Clearly, the MPT creators were once Mutual Fund investors, looking for something better after years ...
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Lemmings At Financial Cliff: Ten Do's and Don'ts - A rally is a beautiful thing, particularly when the correction preceding it was embraced enthusiasti...

Please read this disclaimer:
Steve Selengut is registered as an investment advisor representative. His assessments and opinions are purely his own and do not represent the views of any other entity. None of his commentary is or should be considered either investment advice or a solicitation of business. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be or should be construed as an endorsement of any entity or organization. The reader should not assume that any strategies, or investments mentioned are any more than illustrations --- they are never recommendations, and others will most certainly disagree with the thoughts presented in the article.