NYSE Composite Showing No Signs of Weakness Taking a look at the NYSE Composite old Support/Resistance area at 9678. This particular horizontal trend line has a strong confluence reading. Now the market has cleared many barriers, NYSE could draw to 9678 area very quickly.
We also want to take a look at the NYSE new high and low areas. HIGN 500 readings are considered overbought and LOWN readings over 500 are considered oversold. When looking for historical data HIGN/LOWN comparison is essential.
MYHN and MYLN are the year-to-date high and low readings. If MYHN readings surpass 1000, NYSE is considered overbought. If MYLN readings surpass 1000, NYSE is considered overbought.
Important:
When MYLN-MYHN and HIGN-LOWN readings are both above average, you look for larger corrections within 90 days.
Compare chart to Hindenburg Omen
A technical indicator named after the famous crash of the German airship of the late 1930s. The Hindenburg omen was developed to predict the potential for a financial market crash. It is created by monitoring the number of securities that form new 52-week highs relative to the number of securities that form new 52-week lows - the number of securities must be abnormally large. This criteria is deemed to be met when both numbers are greater than 2.2% of the total number of issues that trade on the NYSE (for that specific day).
Traders use an abnormally high number of 52-week highs/lows because it suggests that market participants are starting to become unsure of the market's future direction and therefore could be due for a major correction. Proponents of this indicator argue that it has been very accurate in predicting sharp sell-offs in the past and that there are few indicators that can predict a market crash as accurately.
