Por Jeffrey A. Hirsch
I recently reached out to market trend expert Paul Desmond of Lowry Research and asked him what his take was on this bull. He was forthright and generous with the stats. He was succinct and did not mince words.
His first response was, “We are seeing some early warning signs that the bull market is weakening. The number of new 52-week highs has been contracting on each new high in the S&P 500 for about 9 months. But, the Advance Decline Lines are all still making new highs, suggesting that the bull market should have at least another 4 to 6 months of further gains in the big-caps.”
Then he sent me “an interesting chart that shows the amount of deterioration taking place. It covers two indicators: (1) the % of NY stocks at, or within 2% of their 52 week highs, and (2) the % of NY stocks down 20% or more from their highs. Very revealing.”
Indeed! In the chart below from Lowry On Demand they note how the percent of stocks near their 52-week highs are a useful indicator for evaluating the health of a bull market.
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