Article Predict Market Tops and Bottoms

T2W Bot

Staff member
1,454 54
The new high/new low ratio (NH-NL) ratio has been around for many years but different investors use this indicator in different ways. Some investors plot the ratio on a chart using the number zero as a neutral designation with positive numbers equaling more new highs than new lows and a negative number equaling more new lows than new highs based on a specified period of time. I have developed and used the NH-NL ratio in a completely different way from some of the more popular methods. I started to follow stocks making new highs while reading the paper Investor?s Business Daily many years ago. I didn?t use the news highs as an indicator but I only studied stocks to buy from the list. As I became a more experienced investor, I subconsciously started to gauge the market while noting if the new highs were increasing or decreasing. After the stock market bubble burst in 2000, I started to record the difference between the daily new highs and the daily new lows. I would enter them into...
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mr_cassandra

Well-known member
349 36
This is good material. Marty Zweig wrote about new highs VS new lows decades ago in his book 'Winning on Wall St'.

He also covered the put call ratio and advisor sentiment as contrarian indicators.

I went on to include it in my own work but normalized the reading(s) by dividing by total actives; because 300 new lows out of 3000 actives is a lot worse than 300 ne wlows out of 6000 actives. (and the nasdaq can and does fluctuate total actives very widely).
 

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