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NYSE and SPX New Lows Confirm Price Bottom

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As we saw a positive divergence materialize on the $SPX with New Lows, we thought it a good time to bring out the NYSE New Highs/New Lows chart, which has also seen a positive divergence between shrinking New Lows and price bottoms that were moving lower. This indicator has been very successful finding market bottoms. Based on the chart below, they can come before a long rally or a very short one.

When we expand the timeframe to include the bear market of 2020, you can see that a positive divergence on New Lows arrived at the bear market bottom.

Conclusion: While we aren't calling this the end of the bear market (definitely not), the current positive divergence is very encouraging as we finish a strong rally day.



Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin

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Erin Swenlin
About the author: is a co-founder of the DecisionPoint.com website along with her father, Carl Swenlin. She launched the DecisionPoint daily blog in 2009 alongside Carl and now serves as a consulting technical analyst and blog contributor at StockCharts.com. Erin is an active Member of the CMT Association. She holds a Master's degree in Information Resource Management from the Air Force Institute of Technology as well as a Bachelor's degree in Mathematics from the University of Southern California. Learn More
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