Books & Trades # 192. May 4, Dr. Alexander Elder The New High New Low Index A New book Education.

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1 Books & Trades # 192 May 4, 2012 Dr. Alexander Elder The New High New Low Index A New book Education Dear Trader, Hello from Annapolis, this year s site our SpikeTrade Reunion. I drove here from New York a day early to make sure everything was ready for us, and since everything was fine I got a few free hours to write this letter. With the Dow having reached a new bull market high a few days ago, it s the time to ask: are we in the midst of a healthy bull market or are we watching a distribution pattern at a bull market top. To answer this question, let s use the New High New Low Index. I consider it the best leading indicator of the stock market. The New Highs are the stocks that rise to a new high for the year on any given day. These are the strongest stocks on the exchange, the bullish leaders. The New Lows are the stocks that fall to a new low for the year on any given day. These are the weakest stocks on the exchange, the bearish leaders. Crowds follow leaders in and out of the markets, which is why the New High New Low Index allows you see which way the leaders are going and what the crowd is likely to do next. Let s take a look at the charts

2 This is a weekly chart of NH-NL. Notice two horizontal dashed lines. The green line is drawn at a minus 4,000 level. Whenever the weekly NH-NL spikes below that level and then rallies above it, it generates a Spike a powerful buy signal. That signal is especially strong when it comes out of a bullish divergence, as happened in areas A and D. A red dashed line is drawn at the plus 2,500 level of weekly NH-NL. This index rises to that level only during true bull markets and never during bear market corrections. You ll notice that it confirmed the bull market in 2009 in area B. There have been several confirmations since that time, but what is shocking is that no confirmations occurred since November This tells us that the bull is running on borrowed time, and the danger level is very high.

3 This daily chart of the New High New Low Index shows a growing bearish divergence. The New Highs (green line) and the daily New High New Low Index (blue line) both reached their peaks in early February. They have been trending lower since that time, even as market indexes continued to rise (remember, the Dow reached its bull market high last week). The leaders are becoming weaker, even as followers press their attack. This is a setup for a reversal. The New High New Low Index is flashing bearish messages in all the timeframes that we track. What s a trader to do? First of all, protect your profits on long positions with stops with hard stops, not mental stops. Second, be extremely cautious about buying. Third, look for opportunities to sell short. Consider joining us at where we update our NH-NL analysis on a nightly basis. A NEW BOOK

We re happy to announce that Dr. Elder and his partner in www.spiketrade.com Kerry Lovvorn have released a new e-book.

4 We re happy to announce that Dr. Elder and his partner in Kerry Lovvorn have released a new e-book. This ground-breaking book will help you master NH-NL, interpret its signals and use it in your decision-making. It includes these chapters: Basic definitions The Weekly NH-NL: How to Construct, Bull Market Confirmations, Divergences, Spikes The Daily NH-NL: Confirmations, Divergences Taking a Short-Term View: The 20-day NH-NL, The 20/-500 Bounce Signal; The 65-day NH-NL The NH-NL Ratio: Major Trends, Intermediate Trends NH-NL in Worldwide Markets Databank This book is illustrated with over 50 charts, including seven series that teach you to recognize the progression of NH-NL signals. It will help you master the best leading indicator of the stock market. We ve published this book in an e-book format. You can download it here and start reading it in just a few minutes. CLASSES Please visit our website for more information on these events May 8, Webinar Current markets with Dr Elder. Enter Dr. Elder s trading room from your own computer and follow his analyses of stocks and futures, including those requested by you. May 19-26, 2012, Macau Pacific Traders Camp You are cordially invited to an event that occurs only once every two years a Traders Camp in Asia Pacific. Join Dr Elder for an intensive course that will help you become a more disciplined

5 and successful trader. He ll be assisted by a guest instructor Colin Nicholson, former President of Australia Technical Analysts Association. June 11 & 18, Webinar Current markets with Dr Elder. Enter Dr. Elder s trading room from your own computer and follow his analyses of stocks and futures, including those requested by you. Best wishes for successful trading from all of us at elder.com Dr. Alexander Elder & staff

Books & Trades # 191. March 31, Dr. Alexander Elder The Impulse System Education/ Traders Camp New Software Special.

Books & Trades # 191. March 31, Dr. Alexander Elder The Impulse System Education/ Traders Camp New Software Special. Books & Trades # 191 March 31, 2012 Dr. Alexander Elder www.elder.com The Impulse System Education/ Traders Camp New Software Special Dear Trader, I ve just returned from the Austrian Alps where I co-taught