Here is a daily line chart showing the number of issues traded on the New York Stock Exchange that advance in price each day. The pink line is the 5 day moving average of this numberwhile the red line is the 10 day moving average. I last commented on the NYSE advancing issues indicator here and here.
The bullish divergence which began last week is still evident and the averages have made two lower lows even as the daily count of advancing issuses has made two higher lows. This shows that the selling pressure of the past two weeks is lifting and we should see a substantial rally now.
I think that once the market rallies for a week or two it will head down again into the 1230-40 zone. When it does I expect to see both the 5 and 10 day moving averages remain above the levels we have seen over the past week. Such action would set up a much more important bullish divergence and be evidence that new bull market highs lie ahead.
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