Warning** today day is about news and news changes sentiment so everything is in the air including yesterday’s closing buy signal on the NYSE new highs, but post news we should quickly be able to judge sentiment and it is not always visible in the price action..
This is our 52 Week New Highs Chart as it sits this Morning: 
Yesterday we popped up above the moving averages, turned both the 5 day MA and the 10 day WMA which in the past has been a good buy signal. Today must follow through.
We have been tracking this sentiment indicator since the 2nd half of August and it helped us call the top where we could clearly see the underlying sentiment working its way off. It is much better at showing us bottoms, as tops in the bull market with lots of sentiment behind them are very-very hard to sell off as we know. Look at how the New Highs were moving lower through the first half of August only to have the prices move sideways and then finally give a little.
There are still members that do not understand my posts.. which I agree could be easier and more interesting and I will think about how to make them easier, or perhaps you have a better idea. Tom has an amazing ability to “tape read”. I use it in this sense, Tom can track the A/D numbers that AJAYVEE publishes for us and integrate the information in his head. Us chartist like to see charts, Tom doesn’t need that. A/D +322 means something to him, to most we know + is better than - (if we are long) and the larger the number the better.
I will write a post next week on how to integrate the A/D numbers and what they mean. Tom remembers the last number, the one before that.. so he can trend the numbers in his head. For me I have to scroll back through the log.
So I publish between every hour and half our current value for the 52 week new high indicator. Now my workstation auto-tweets the values every 1/2 hour. [btw. if you are not following us on twitter you should be http://twitter.com/redliontrader and http://twitter.com/tomandprisha]. Each tweet has a link to the “decoder ring” for these dry technical posts.
Today we are on a buy signal.. It might be a “false breakout” signal but yesterday the NYSE had a good day for New Highs.. 76. That means that there were 76 symbols yesterday that people were willing to buy at a premium, at their highs.. they believe that there is still value in those symbols. We have to go back to 8/28 at near the highs to find a number like this.
To build confidence in our numbers watch my posts today and see how we are doing. To keep the buy signal in play we need to close above 70 new highs. Beating yesterday’s 76 new highs would be very bullish. Also integrate the numbers over time. Below is the last 6 posts from yesterday to help you understand these numbers and I have show you my log on how I think about the numbers.
| Post | Time | What I am thinking. |
| $52WHN:NewHighs(). NYSE: 52 D1:136% D5:45% | 1:30pm | Wow.. we are way a head of yesterday! – 136% |
| $52WHN:NewHighs(). NYSE: 60 D1:150% D5:62% | 2:00pm | Getting even stronger! went from 136% to 150% ahead of yesterday, very bullish against the 5 day. |
| $52WHN:NewHighs(). NYSE: 68 D1:143% D5:57% | 2:30pm | Back down a little |
| $52WHN:NewHighs(). NYSE: 70 D1:133% D5:49% | 3:00pm | Two in a row down a little from last 1/2 still bullish |
| $52WHN:NewHighs(). NYSE: 71 D1:129% D5:45% | 3:30pm | Have pushed the 5 day now sure to make a buy signal |
| $52WHN:NewHighs(). NYSE: 76 D1:111% D5:42% | 4:00pm | Perfect.. 76 and still 2x yesterday only worry is that as we rallied in the afternoon we didn’t pick up momentum. Note. |
To review how to interpret the New High data read my How to Interpret the New High Data post.
See you in the Markets!
-RLT
