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Viewing declining issues and new lows intraday shows the Trend Exhaustion
Index was accelerating upward as the NYA was dropping in the last 5 days.
Whether it has finished remains to be seen. On Wednesday the NYSE 52 week
New Lows saturated at 900+ early in the morning. The declining issues
peaked early in the morning and declined the remainder of the day driving
the TEI ratio higher into the end of day. Since the New Lows "lock in" once
they occur for the day they only increase or remain flat during the day.
The ratio of New Lows / Declining Issues thus increased as the declining
issues declined. This forms the exhaustion peak. The price bottoming
process will be accompanied by a decrease in New Lows and a decrease in the
NL / DI ratio and a lower peak on an end of day basis. The NL / DI ratio
pattern lags price. We need a lower peak on the TEI to confirm the low is
in. That takes one day for the high, a second day for the pull back, a
third day for another runup to a lower high, a fourth day for the pullback
in the ratio. The associated ratio of NewHighs / (NewHighs + NewLows) has
been running at 1.69% for 4 days. A confirmed price low will see this ratio
rise off the bottom. Hope that adds some perspective.
bobr
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