NYSE
internal momentum is…starting to show signs of improving as the latest cycle
bottom draws to a close. It’s worth
noting that at no time in the last few weeks did the number of stocks making
new 52-week lows rise above 40. This is
a sign that internal selling pressure was contained during the March internal
correction.
There
are also preliminary signs that the number of new 52-week highs is starting to
expand; on Monday the new highs rose to 144, which is the highest number we’ve
seen since March 18. If this number
continues to expand we’ll soon have a confirmed cycle bottom signal. The NYSE short-term directional indicator
turned up today as well for the first time in weeks. Another 2-3 days of rising will also be
interpreted as a bullish confirmation signal.
Finally,
I would bring your attention to the dominant longer-term NYSE internal momentum
indicator. This is the longest of the
components of the NYSE Hi-Lo Momentum (HILMO) index, and until a week or so ago
this indicator had been declining for months.
The longer-term component of HILMO isn’t as important as the dominant
interim indicator or the short-term directional component, yet it’s still
fairly important in its own right when it’s rising on a sustained basis. The recent turnaround in this indicator is
another technical sign pointing to a potentially bullish month of April.
