We get the 52-week High/Low indicator from the total highest and lowest price at which stocks has traded in the past 12 months, or 52-week on a stock exchange like NYSE and others. We can use the data in different ways to analyze the market of which some are below.
The chart above combines the raw data in one chart plotted against the NYSE composite. It contains:
- New 52 week high (green).
- New 52 week low (red).
- The difference between both (positive or negative) - Pink.
- The ratio of the difference in (3).
- "The Record High Percent Index" which is a market breadth indicator created by dividing the number of 52-week highs for a given market by the sum of the number of new highs and the number of new lows.
Record High Percent = New Highs / (New Highs + New Lows)
The values range between 0 and 100. A value of 0 means that there were no new highs on that day. A value of 100 means that there were no new lows on that day. A value of 50 means that the number of new highs and new lows were equal.
As of today, notice the following:
- The market at levels that matched the end of all previous corrections since the bottom in March 2009.
- The difference between new high and low during that time was always positive with exception to one single day of -6. It was a hallmark of this rally and a dip in the negative that sticks will be an ominous sign.
- Today, we had an early warning sign by making the highest one day new 52 weeks lows (red bar) since March 12, 2009.
Click above to enlarge - Daily
Click above to enlarge - Weekly
The above two charts are the lowest part of the chart above them. It is the 10 days simple moving average of "The Record High Percent Index". Very valuable information can be determined from them.
Click above to enlarge
Above is one of my favorite ways to use the data by plotting the difference between new high and low as cumulative. Bullish and bearish crosses against the 5 and 10 days Moving averages tend to signal major changes in current market trend.
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