StockFetcher Forums · General Discussion · Fosbacks HLL index says...........<< >>Post Follow-up
24 posts
msg #103010
Ignore aziam
10/18/2011 5:58:57 PM


Mark Hulbert at Marketwatch has a good write up today of Norm Fosback’s High Low Logic Index, which is currently very bullish. It’s nice to see something positive about the market for a change.

The indicator I’m referring to is the High Low Logic Index, which was devised in the 1970s by Norman Fosback, then the President of the Institute for Econometric Research, and currently editor of Fosbacks Fund Forecaster. The index represents the lesser of two numbers: New 52-week highs and new 52-week lows with both expressed as a percentage of total issues traded.

In fact, there have been only four other occasions over the last 25 years in which the Ned Davis Research version of the High Low Logic Index has moved from bearish territory above 4.05% to as low as it is today, and all four came close to a major market bottom: Late 1987, late 1990, early 2003, and late 2008.

I understand the point of the indicator. Very few new highs suggest you might be near a bottom. Very few new lows suggest the market is already trending strongly. The last few days, however, have been marked by very few new highs or new lows. That might be evidence only of indecision in the middle of a range.

The NYSE high-low index that we track is trending weakly upward right now as well, lending at least some credibility to the thesis. We’ll have to see how it pans out, but for the record, I hope that Fosback’s indicator is correct!

230 posts
msg #103017
Ignore wkloss
10/18/2011 11:49:02 PM


I hope so too but nothing in our economy has been fixed so any rally will probably just be another version of political window dressing. Although I'm no fan of the present administration, both parties engage in these charades.

You might be interested in an October 2011 article in Technical Analysis of Stocks & Commodities starting on page 12. It combines Fosback's Hi/Lo Logic Index with a New Highs/New Lows 10 Day Average indicator.


24 posts
msg #103019
Ignore aziam
10/19/2011 9:18:20 AM

Agreed. However, sometimes - and this may be one of those times and it may be not - the market runs totally counter to economic reality and becomes the engine rather than the caboose. We shall see..............

StockFetcher Forums · General Discussion · Fosbacks HLL index says...........<< >>Post Follow-up

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