There Are No New Lows

JC Parets
February 28, 2024

A lot of the major US Stock Market indexes have been having a hard time making much progress this month.

That makes sense to me because there are simply fewer and fewer stocks that are going up in price.

It's a market of stocks, after all right?

The way I learned it was, "Don't fight Papa Dow".

As you can see below, Dow Futures are at the same levels they were on February 2nd. We start March this Friday.

Also, you can see momentum continue to roll over very aggressively, particularly as any new highs in the indexes failed to hold:

The Nasdaq and S&P500 have also failed to make any progress over the past 2-3 weeks.

And even the Russell2000 Small-cap Index and Dow Jones Transportation Average are still stuck at the same levels they were at way back in December.

Last week's new highs in some of these large-cap indexes were accompanied by some of the lowest readings in stocks making new highs that we've seen.

It's pretty impressive actually, just how few stocks have been able to go up in price, despite a couple of indexes making new highs.

But here's what we haven't seen yet.

New lows.

Mathematically, we cannot have a market correction of any kind without the prices of stocks falling.

Again, that's just math.

No opinions here. Facts only.

So if you're looking for this "lack of upside" in stocks, to turn into new downside for stock prices, an expansion in the new lows lists would be next.

But to be clear, we have not seen it.

Also, one thing I'd like to address is the relationship between the new 52-week highs list and the new 52-week lows list.

Here's a hint: There is none. If we know there's nothing going on in the new 52-week lows lists, then why would we arbitrarily subtract nothing from the new highs list?

Before you see new 52-week lows spiking, we'll be watching for spikes in the new 10-day lows list, new 1-month lows list and even the new 3-month lows list.

We haven't seen any of these rise.

And for us, these are way more important than anything happening in the new 52-week lows list. And that's simply because there isn't anything happening there.

Why would there be?

Looking at the new 52-week lows list today is like trying to build a snowman in the summertime.

Silly.

 

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