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market_indicators:record_high_percent [2019/06/24 19:38] 127.0.0.1 external edit |
market_indicators:record_high_percent [2022/05/18 20:12] (current) betseyp [Interpretation] |
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| Because Record High Percent shows the percentage of new highs, this number can be deceiving. For example, an index could have 4 new highs and 1 new low. The Record High Percent would be 80 {(4/(4+1))*100}. While this reading seems strong, four new highs is not that strong. Similarly, Record High Percent based on stock indices with 100 or fewer stocks will reach extremes more often than broad-based indices. Record High Percent for Nasdaq 100, S&P 100 and Dow Industrials will have more volatility and noise than Record High Percent for the S&P 500, Nasdaq and NYSE. | Because Record High Percent shows the percentage of new highs, this number can be deceiving. For example, an index could have 4 new highs and 1 new low. The Record High Percent would be 80 {(4/(4+1))*100}. While this reading seems strong, four new highs is not that strong. Similarly, Record High Percent based on stock indices with 100 or fewer stocks will reach extremes more often than broad-based indices. Record High Percent for Nasdaq 100, S&P 100 and Dow Industrials will have more volatility and noise than Record High Percent for the S&P 500, Nasdaq and NYSE. | ||
| - | {{chart_school:market_indicators:record_high_percent:rhp-2-nyadow.png|Record High Percent - Chart 2}} | + | {{:market_indicators:record_high_percent:rhp-2-nyadow.png|Record High Percent - Chart 2}} |
| Chart 2 shows Record High Percent for the Dow in red (bottom) and Record High Percent for the NYSE in blue. Notice how the Dow High-Low Index hits extremes on a regular basis. This is because there are only 30 stocks and it is rather easily skewed. In contrast, the NYSE High-Low Index is more stable and remains largely above 50 during the entire uptrend. The NYSE trades over 3000 stocks per day and is not easily skewed. In general, broader indices usually work better for breadth statistics. | Chart 2 shows Record High Percent for the Dow in red (bottom) and Record High Percent for the NYSE in blue. Notice how the Dow High-Low Index hits extremes on a regular basis. This is because there are only 30 stocks and it is rather easily skewed. In contrast, the NYSE High-Low Index is more stable and remains largely above 50 during the entire uptrend. The NYSE trades over 3000 stocks per day and is not easily skewed. In general, broader indices usually work better for breadth statistics. | ||