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March 14, 2006
Nasdaq Net New Highs
The 10-day SMA for Nasdaq Net New Highs has been pretty good at calling the medium-term swings in the Nasdaq. The indicator broke down in August and this foreshadowed the summer decline. After plunging into negative territory in October, the indicator recovered and broke resistance in November to turn bullish again. Flash forward to March 2006 and the indicator is breaking down to flash a sell signal. The 10-day SMA broke the four month trendline, formed a lower high and moved below its prior low. This makes for a downtrend in new highs. However, the indicator is still above zero and positive overall. This may keep trading choppy and a move into negative territory would signal that the downtrend was picking up speed.
Posted by Arthur B. Hill at March 14, 2006 09:34 AM