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Instrument C · Net New Highs vs. New Lows

New 52-week highs against new lows on both exchanges — one of the cleanest reads on who is really winning beneath the index.

Instrument C — Net new highs vs. new lows

Who is making new 52-week highs — and new lows

Every day, some stocks print a fresh 52-week high and some print a fresh 52-week low, on both the NYSE and the NASDAQ. The difference — net new highs minus new lows — is one of the cleanest reads on who is really winning beneath the index.

The healthy state

New highs should lead in an uptrend

In a genuine advance, new highs dominate and the net stays positive and expanding. A common way to frame it is the Record High Percent — new highs ÷ (new highs + new lows) — and its 10-day average, the High-Low Index: readings above 50 mean bulls are in control, consistently above 70 accompanies a strong uptrend, below 50 tips bearish, and below 30 marks a strong downtrend.

The warning

Divergence — the advance narrowing

The signal to respect is divergence: the index keeps pushing to new highs, but net new highs shrink or net new lows start expanding. That means fewer and fewer stocks are carrying the market — leadership is thinning even as the headline index looks fine. When the index leads but new lows are creeping up, treat it as a yellow flag that the move is running out of fuel.

The extreme

A spike in new lows can mark the bottom

The flip side is powerful. In a hard correction, new lows explode — and an extreme spike in net new lows is a hallmark of capitulation, when the last sellers finally give up. When that spike then dries up and reverses, and it lines up with a follow-through day (Instrument B), you often have a durable low. Watch both exchanges: the NASDAQ skews to growth and tech, the NYSE is broader — when they disagree, that gap is information too.

Keep going

The rest of the panel

Direction is a cross-check, never one gauge. Read the other instruments, then bring them together.

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