Lowry Research Corporation examines how supply and demand data can help identify major market tops before broad indexes peak. The paper argues deterioration often begins beneath the surface, with less than 11% of NYSE stocks making new highs at final bull market peaks, highlighting the risks of relying on headline indexes alone.
The Warning Signs of Major Market Tops
Lowry Research Corporation
Research
9 Pages
Key Takeaways
New Highs Contract: At historical bull market peaks, fewer than 11% of NYSE stocks reached new highs, and in 1929 only 2.3% did so despite a final DJIA high.
Breadth Weakens First: Small and mid cap stocks, representing roughly 70% to 90% of listed equities, often begin deteriorating 4 to 6 months before major index peaks.
Trend Participation Falls: Healthy bull markets typically see 75% to 90% of stocks above their 30 week moving averages, versus 60% or less near final market tops.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
