October 4, 2026- When New Highs Are No Longer Being Confirmed
Vincent van Gogh
Vincent van Gogh is one of art history’s most influential figures. He is known for his bold use of color, expressive brushwork, and emotionally charged compositions.
Though he struggled with mental illness and found little commercial success during his lifetime, his work would later revolutionize modern art, inspiring movements such as Expressionism and Fauvism.
Masterpieces like Starry Night, Sunflowers, and The Bedroom showcase his ability to infuse ordinary scenes with deep emotion and energy. His unique artistic vision, marked by thick impasto and swirling, dynamic forms, has made his paintings among the world’s most recognizable and beloved.
Beyond his artistic achievements, Van Gogh’s personal story—marked by perseverance, passion, and an unwavering dedication to his craft—continues to resonate with audiences, making him a timeless symbol of artistic genius and resilience.
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“There is nothing new under the sun.” Ecclesiastes 1:9
“What happens today has happened before and will happen again.” Livermore
“The farther backward you look, the farther forward you will see.” Winston Churchill
“Rather than love, money, fame, give me truth.” Henry David Thoreau
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Tracking Account Valuation January 4, 2022 – $1,212,085
Tracking Account Valuation September 12, 2026- $1,975,051
Since 2021: +62%
Primary Trend: ~ Downtrend
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Positions: 7% TZA, 7% SQQQ, 84% Cash
Hard stop: TZA 41.66, SQQQ 31.27
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4:00 PM: Stoch: RISING
Daily LOLR STS
4/3-DT 4/3-DT 4/3-UT
Breadth: 561/724
*ADR: 1.74/SPY: +5.65
NYMO: -15 Advancing Intraday
NAMO: -12 Advancing Intraday
The Summation Index is Falling
*NYSE Advance-Decline Ratio
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When New Highs Are No Longer Being Confirmed
Throughout this year, we have repeatedly made the same observation: the major market averages can continue to reach new all-time highs, but the broad array of internal market indicators that normally confirm the health and strength of a Primary Bull Market have increasingly failed to do so.
That distinction is becoming more important with every new high.
A new all-time high in an index is, by itself, only a statement about the price of that index. It does not tell us whether the broad market is participating in the advance, whether leadership is expanding, or whether the underlying trend remains healthy. For that, we must look beneath the averages.
And that is precisely what we have been doing throughout 2026.
The evidence has become increasingly difficult to dismiss.
The averages have been making new highs—but the market underneath them has not
Earlier this year, we began documenting a growing list of nonconfirmations involving breadth, market leadership, new highs versus new lows, the McClellan Oscillators and Summation Indexes, and our Seven Sentinels.
The message from these indicators has been remarkably consistent.
While the SPX and COMPQ have periodically advanced to new all-time highs, the broader market has failed to reproduce the characteristics normally associated with a healthy Primary Bull Market.
This is not a single-indicator argument.
It is the cumulative weight of evidence from a broad array of independent measures of market participation.
That is an important distinction.
One indicator can be wrong. Two can be misleading. But when breadth, leadership, new highs versus new lows, Advance-Decline Lines, and other measures of internal strength repeatedly fail to confirm an index’s new highs, the absence of confirmation itself becomes important information.
This is why we have repeatedly emphasized that the headline averages can conceal what is actually happening beneath the surface.
The capitalization-weighted SPX, in particular, can remain elevated because a relatively small number of very large companies carry an enormous influence on the index. Meanwhile, hundreds of other stocks can be deteriorating.
Eventually, however, the deterioration beneath the surface matters.
A remarkable new-high/new-low statistic
Last month, we presented what may be the most extraordinary evidence yet.
We showed that the relationship between 12-month new lows and 12-month new highs had reached an extreme that, based upon our historical review, represented a 100-year record.
In other words, we were witnessing an extraordinary number of stocks making new 12-month lows relative to those making new 12-month highs—even while the major averages remained close to their all-time highs.
That is not the normal behavior of a broad and healthy bull market.
In a genuine Primary Bull Market, new highs should increasingly dominate new lows as the market advances. More and more stocks should be participating in the advance, breaking above their previous highs and establishing new highs of their own.
Instead, we have seen the opposite phenomenon.
The major averages have been able to establish new highs while an extraordinary number of individual stocks have been establishing new lows.
That is precisely why we have argued that the number of new highs relative to new lows is one of the most useful ways to determine whether an advance is broadening or narrowing.
Now the Advance-Decline Lines are joining the argument
This week we want to take that analysis one step further.
The NASDAQ Advance-Decline Line did not confirm the most recent all-time high in the COMPQ.
That is significant because the NASDAQ A-D Line measures the cumulative participation of advancing and declining stocks across the exchange. It therefore provides a much broader view of what is happening beneath the headline index.
The COMPQ can rise because a relatively small number of large technology companies rise.
The NASDAQ Advance-Decline Line cannot disguise the participation—or lack of participation—of the broader list of stocks in the same way.
Consequently, when the COMPQ reaches a new all-time high while the NASDAQ A-D Line fails to confirm it, we have another important nonconfirmation.
And this is not merely a technical curiosity.
Historically, major Primary-Trend tops have tended to occur after the deterioration in market breadth, and participation has become visible beneath the averages. The purpose of studying the A-D Lines is therefore not to predict the exact day of a market top. It is to determine whether the underlying market is confirming the behavior of the averages.
Right now, it is not.
The SPX may be approaching the same condition
The next development could be even more important.
The SPX is currently within approximately 1.5% of establishing another all-time high.
If it succeeds in doing so without the NYSE Advance-Decline Line also reaching a corresponding new high, the SPX will have produced a new all-time high without confirmation from one of the broadest and most historically important measures of market participation.
That would represent another significant nonconfirmation.
The importance of this indicator becomes clearer when we step back from the current market and examine history.
Over the past century, the NYSE Advance-Decline Line has confirmed nearly every important Primary-Trend top by deteriorating before or around the time the major averages reached their final highs.
The major tops of the new century provide particularly useful examples.
The 2000 market top was preceded by deterioration in breadth and a failure of the broader market to confirm the strength being displayed by the major averages.
The same basic phenomenon was evident at the 2007 Primary-Trend top.
Here’s What Followed that non-confirmation:
The point is not that every divergence produces an immediate market decline.
It does not.
Markets can remain overbought, overvalued, and internally unhealthy for considerable periods of time. They can also produce sharp counter-trend rallies along the way.
The point is that when the major averages continue upward while the broad market fails to confirm that strength, the character of the advance has changed.
Confirmation is what matters
This brings us back to one of the central themes of our work.
We are not impressed simply because an index reaches a new high.
We want to know whether the market as a whole is confirming that new high.
A healthy Primary Bull Market should produce expanding participation. Leadership should broaden. New highs should overwhelm new lows. Breadth should strengthen. The Advance-Decline Lines should confirm the rising averages.
That is what confirmation looks like.
What we are seeing in 2026 is increasingly the opposite.
The SPX and COMPQ have produced new all-time highs, but the broader evidence has repeatedly failed to confirm them. The deterioration in new highs versus new lows has reached an extraordinary historical extreme. The NASDAQ A-D Line did not confirm the most recent COMPQ high. And if the SPX advances less than another 1.5% to establish a new ATH without the NYSE A-D Line following it, we will have another important historical nonconfirmation.
[CHART INSERTION: Summary chart — major 2026 index highs versus internal confirmations]
None of this tells us that the market must decline tomorrow.
That is not the purpose of these indicators.
Instead, they tell us something potentially more important: the quality and breadth of the advance are deteriorating.
Why this matters now
Markets do not normally announce a Primary Bear Market by ringing a bell at the top.
The process is usually much more subtle.
First, leadership begins to deteriorate.
Then breadth weakens.
New highs become fewer while new lows increase.
The Advance-Decline Lines stop confirming the averages.
Eventually, the major averages themselves begin to recognize what the internal market has already been saying.
That sequence is why we have spent so much time this year examining market internals rather than simply following the headline indexes.
The internal evidence often changes before the averages do.
And that is precisely why it deserves our attention.
The market may still produce another new all-time high. It may even produce several.
But if those highs continue to occur without confirmation from the broader market, each new high tells us less about the health of the Primary Trend and more about the narrowing concentration of leadership supporting the averages.
That is an important change in market character.
The weight of the evidence
We have now spent an entire year documenting these developments from many different perspectives.
The conclusion is not based upon one oscillator, one breadth statistic, or one chart.
It is based upon the convergence of evidence.
The number of stocks making new 12-month lows relative to new highs has reached an extraordinary historical extreme.
The NASDAQ Advance-Decline Line did not confirm the COMPQ’s latest all-time high.
The SPX is approaching a potentially important new high that, if achieved without confirmation from the NYSE Advance-Decline Line, would add another major nonconfirmation to the historical record.
And beneath all of this, numerous other internal measures we have followed throughout the year continue to tell us that the broad market is considerably weaker than the major averages suggest.
This is why we continue to believe that investors should look beyond the headline indexes.
New highs are important.
But confirmed new highs are far more important.
A market that rises because most stocks are participating is one thing.
A market that rises while fewer and fewer stocks participate is something entirely different.
The difference may not be visible in the index itself.
But eventually, history tells us, it becomes visible.
And that is why we will continue to watch the internals—not simply the averages—as we move forward. And those internals are now universally failing.
Vincent van Gogh
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