Zeev's Turnips Patch-No Politics (ZEEV)

[SteveO]

Zeev,
52 week highs seem to be so much a product of what the last 52 weeks have been like. It seems to me that any use of this indicator must take into account what we are comparing to. Many of the 52 week highs were set early last year. As we lose those high readings from last Spring and start taking into account the big drop last June, 52 week highs will increase even if this market goes nowhere.

As for stocks that set new highs in January, 2003 or December of 2002, this rally has only run 8 weeks while the October 2002 rally lasted for about 13. The Feb/March, 2003 massacre erased much of those gains. It would be hard to believe that we could just tack back on those points lost in Feb/March in such a short period of time. If we did, the bears would be trumpeting that we have come too far too fast. :)

In sum, when there is a big, broad sell-off, stocks have a long way to go to make up for their losses. The bigger and broader the sell-off, the longer it will be until you see new highs. But, it is exactly these broad sell-offs that create the kind of capitulation that creates a strong bear market rally.

One writer I have a lot of respect for put his bear suit away for the time being. it is interesting that he sees this move as "different".
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