Skip to main content
Track Market breadth
12 / 71
Search the archiveLibrary
Library

1990issue C061-2

Ten-day HI/LO extremes as a long-horizon breadth signal

Daily new highs and new lows can be restated as a 10-day HI/LO share. Historical standard-deviation bands then keep only the unusual readings, and a horizon check left a contrary long-swing condition rather than a near-term continuation cue.

  • Market breadth starts as daily new-high and new-low counts and becomes a HI/LO index: a 10-day percentage of new highs versus the combined high-and-low total.
  • Unusual readings were tagged with two historical standard-deviation bands around the mean, then scored against later industrial-average direction at five fixed horizons.
  • Of the ten horizon-and-band tallies in a 10-year sample of tagged extremes, only the one-standard-deviation rule at the one-year horizon was described as highly significant, with a 65 percent alignment to next-year direction.
  • Those extremes were read as an overbought/oversold reading and reserved for long-term swings once the index moved above 92.4 percent or below 35.7 percent, not for the shorter windows that were also scored.
Entries in this reading2 entries
HI/LO4 readingsCurrent trackMarket breadth120 readings

Daily counts become a 10-day share

Market breadth is the daily count of issues making new highs and new lows, treated as a chart-scale condition that can be turned into a testable signal. The HI/LO index restates those prints as a 10-day percentage: 100 times the 10-day total of new highs, divided by the 10-day total of new highs plus new lows.

Standard-deviation bands flag the extremes

Unusual readings were tagged with two historical standard-deviation bands around the mean: two-thirds of a standard deviation, and one full standard deviation. Under the one-standard-deviation rule, the upper band was 92.4 percent new highs and the lower band was 35.7 percent new highs.

Only one horizon survived the check

A horizon check scored each tagged reading against later Dow Jones Industrial Average direction at one week, five weeks, 13 weeks, 26 weeks, and one year. The two band widths produced ten tallies. The comparison used a 10-year sample of those tagged extremes.

Of the ten horizon-and-band tallies, only the one-standard-deviation rule at the one-year horizon was described as highly significant, with a 65 percent alignment to next-year industrial-average direction. The stated use of the bands was for long-term swings once the index moved above 92.4 percent or below 35.7 percent, not for the shorter horizons that were also scored.

Read an extreme contrary to the tape

Those extremes were framed as an overbought/oversold reading: an excess of new highs as a bearish condition and an excess of new lows as a bullish condition.

A six-year qualitative chart check described clustered 1984 bullish readings, weaker mid-1980s bearish readings, a well-aligned early-1987 bearish reading, and post-crash 1987 bullish readings that matched the subsequent swing.

10-day new-highs share vs one-standard-deviation bands

The 10-day new-highs share of combined new highs and new lows, read off Figure 1, with Merrill’s one-standard-deviation lines at 92.4% and 35.7%. Readings above the upper band are the bearish long-swing extremes; readings below the lower band are the bullish ones. Only the one-year horizon survived his batting-average check.
The 10-day new-highs share of combined new highs and new lows, read off Figure 1, with Merrill’s one-standard-deviation lines at 92.4% and 35.7%. Readings above the upper band are the bearish long-swing extremes; readings below the lower band are the bullish ones. Only the one-year horizon survived his batting-average check.NYSE new highs / new lows (10-day HI/LO share) · 10-day · 1984-01-01T00:00:00.000Z to 1990-03-31T00:00:00.000Z

Curve points are approximate readings from the printed Figure 1 raster, not a source table. The scan is inverted on the page (low percentages toward the visual top). Bands are the article’s stated one-standard-deviation benchmarks. The six years plotted are about 1984 through early 1990; Merrill notes that 1980–81 scored well but are not on this figure.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
12 of 71 in the Market breadth track
19901-9 pp.Next on Market breadthConfirming index cycles with breadth, volume, and wavesThe first vote at an index high is whether the daily advance/decline line also makes that extreme.
All readings on this track · 71 readings
  1. 1987How a failed rebound, weak breadth, and cycle dates broke the 1987 bull case
  2. 1988Diagnosing market bottoms with breadth, divergence and averages
  3. 1988Diagnosing index tops with breadth divergences
  4. 1988Record highs versus seven-day breadth and divergence
  5. 1989Constructing a percentage-scaled internals composite
  6. 1989Constructing a weekly block-tick breadth z-score
  7. 1989Constructing a dual-rate advance-decline oscillator
  8. 1989Normalize advance-decline series for a common-scale comparison
  9. 1990Unchanged-issue share as a narrow-breadth case study
  10. 1990Evaluating daily and weekly unsigned plurality breadth
  11. 1990Constructing paired new-high and new-low breadth indicators
  12. 1990Ten-day HI/LO extremes as a long-horizon breadth signal
  13. 1990Confirming index cycles with breadth, volume, and waves
  14. 1990Index cycle gates from breadth and volume
  15. 1990Constructing advance-decline breadth indicators
  16. 1990Weekly advance-decline oscillator: weight map, extremes, and spike cycle
  17. 1990Price-weighted construction distorts breadth, support, and trend
  18. 1991A peak-sequence test from the new-highs-to-advances-ratio
  19. 1991Fuzzy rules that turn daily market-breadth into a session consensus
  20. 1991From daily breadth tallies to a weighted consensus signal
  21. 1991Retesting market-breadth when market structure changes
  22. 1991Constructing TRIN as a breadth-volume ratio
  23. 1991Build the market clock before you read a price bar
  24. 1991A construction audit of the long-horizon trading index
  25. 1991Independent formula timers kept as a testable combination
  26. 1992When identical TRIN prints come from different pairings
  27. 1992Grade closing tick before a next-session breadth hypothesis
  28. 1992Noncumulative advance-decline swing confirmation
  29. 1992Five-day sum construction of the trading index
  30. 1992Daily closing-trin extremes and next-day direction
  31. 1992A three-layer audit: regime, breadth, and group RSI
  32. 1992Constructing a nine-state trend, momentum, and breadth score
  33. 1993Constructing a market-volume-impact rating from nested averages
  34. 1993When advance-decline confirmation counts the wrong universe
  35. 1993Constructing breadth momentum from advance-decline smoothing
  36. 1993Constructing a cumulative market-thrust line
  37. 1994Three-horizon construction of the Haurlan index
  38. 1994Checklist-gated session entry in 1993 index futures
  39. 1994Read one advance-decline pair through three windows
  40. 1994Constructing calibrated market-breadth summation indexes
  41. 1994Constructing a two-speed advance-decline oscillator and a calibrated summation
  42. 1995NYSE tick extremes and candlestick reversal entries
  43. 1995Assembling range, breadth, and a stored stop into one procedure
  44. 1995Restating market breadth timing rules as ratios
  45. 1995Constructing breadth ratio gates after lookback drawdowns
  46. 1995Building a short-range breadth and price oscillator
  47. 1996Constructing a smoothed advance-decline trend filter
  48. 1996Smoothed advance-decline alerts at the 1987 and 1990 turning points
  49. 1996Constructing breadth, RSI, and stochastic range filters
  50. 1996New-high and new-low counts as a breadth construction
  51. 1996Constructing the four-input breadth-volume ratio
  52. 1996Constructing the McClellan oscillator and a calibrated summation index
  53. 1996Declare the oscillator seed, then calibrate only the summation index
  54. 1997Three-gate centered strength in market-breadth construction
  55. 1997Daily advance-decline and new-high new-low breadth signals
  56. 1999Index-fund positions as a majority-vote committee
  57. 2000Tick, tiki and TRIN as a three-layer session confirmation stack
  58. 2000Constructing an advance-decline oscillator from one listed tape
  59. 2001Market breadth, beta, and volume-price confirmation
  60. 2001Regime context from relative venue volume, breadth, and intermarket spreads
  61. 2002When NYSE breadth misreads operating-stock participation
  62. 2003Two-gate breadth divergence and a trend filter for rally tops
  63. 2003Market internals confirm or diverge from the index
  64. 2004Constructing the McClellan oscillator and summation index
  65. 2005Intraday index-futures divergence as a three-part session hypothesis
  66. 2005Breadth summation levels as a short-term signal filter
  67. 2005Checking trend versus range with breadth and divergence
  68. 2011Constructing a Nasdaq hi-lo index from highs, lows, and issues traded
  69. 2013Cumulative advance-decline versus a one-year average
  70. 2013A one-year breadth average as a participation gate
  71. 2015Falsifying a healthy correction with breadth and support
By fieldMarket breadth101 readingsBy year199092 readings
All 120 readings tagged Market breadth
Also on Market breadth5 readings
1996Constructing the four-input breadth-volume ratioHI/LO2011Constructing a Nasdaq hi-lo index from highs, lows, and issues tradedHI/LO2020High-low activator, directional oscillator, and momentum swing agreementHI/LO1986Evaluating advance-decline plus-day runs against chance baselines1987How a failed rebound, weak breadth, and cycle dates broke the 1987 bull case