Net new lows at rare lowlevels
This is an offshoot of original facintaion with contrarian indicators sparked decades ago by Marty Zweigs book 'winning on wall st'. Marty was a frequent guest on wall st week years ago and covered advisor sentiment, invented the put call ratio and talked about several other contrarian signs like new lows. The point being on all of them: when everyone is the most discouraged, it turned out to be time to buy.
Back in the day, IBD used to sell an awesome 25 yer chart with those and more tracked along side the major averages so you could see the inverse relationshsip.
Anyway, I took it a step further to creat <net> new lows. Briefly put I subtract new lows from new highs and divide the result by the total actives. My reasoning was two fold.
1. 10 new highs and 300 new lows is worse than 100 new highs and 300 new lows.
2. 300 new lows versys 3000 actives is worse than 300 new lows versus 6000 actives.
Example chart $nyhl:$nytot (make sure to put a colon : between the two symbols at stockcharts.com and also use the 3 year setting for perspective.
Long story short, we are at low levels seen only on 9 days in the last ten years overall.
You CAN time the market!
But only after you trash the big 3 myths.
Myth 1 - its possible to get every point of every move
...Myth 2 - you'll never have a drawdown
......Myth 3 - you'll never have a loss
