20 Weeks of More New Lows Than New Highs

JC Parets
April 12, 2022

In bull markets we see more stocks making new highs than new lows.

I know that probably sounds like common sense, but you'd be surprised....

It's really just basic math. You need more stocks going up and making new highs, than stocks going down and making new lows.

And although we did see a couple of days of more new highs than new lows recently, we haven't seen that for a sustained period, yet.

In fact, we're going on 20 straight weeks of more new lows than new highs.

When you include all the stocks that trade on the NYSE and those in the Nasdaq, this is the most consecutive weeks of more new lows than new highs since the Great Financial Crisis of 2008-2009.

And I have people asking me if stocks will enter into a new bear market.

My question to those people is, what do you call the past year?

Is this what bull markets look like?

I'd argue no, which continues to point me to the stocks and sectors bucking the trend, going up in price and making new highs, while avoiding those that are going down and making new lows.

It's a bifurcated market. It's not a bear market for investors who have been in Energy, Utilities, Large-cap Healthcare and Mining stocks.

It's only been a bear market for investors with too much growth exposure.

We're seeing the widest dispersion among sector returns since Q4 2000.

If you're going to be long, let's focus on the leaders.

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