New Lows Peaked a While Ago

November 7, 2023

Everyone knows that it's a market of stocks.

Sometimes investors forget that there are 500+ stocks in the S&P500, 30 stocks in the DJ Industrial Avg and approximately 3000 stocks in the Russell3000.

This is all free and public information.

But still, investors forget, especially during times when it's most important to remember.

That's just human nature.

We take things for granted until we need them the most.

This quarter has been a prime example.

You see, while the S&P500 and other indexes were making new lows last month, the list of stocks making new lows had already peaked in early October.

We discussed the lack of new 52-week lows already.

But here's a closer look at the new 6-month lows on the NYSE, or lack thereof to be more specific:

Notice how the new lows in the indexes were NOT accompanied by an expansion in stocks making new lows.

We saw the same thing in the list of new 3-month lows:

This reminds me a lot of last year.

Remember, by the time the major indexes bottomed out in Q4 of 2022, there weren't many stocks left still making new lows.

The new lows list had already peaked in Q2.

People told me I was crazy for buying stocks in October last year. But those same people hadn't bothered to count how many stocks were making new lows.

They were being blinded by the shiny light coming from the indexes.

Don't let that happen to you this year.

Is the shiny light blinding you? Or have you taken the time to count how many stocks are going up vs going down?

It's a market of stocks.

And there is money to be made from the long side before the end of the year.

Catch up on our favorite trade ideas here.

Let me know what you think!