LOWRY’S NEW YORK STOCK EXCHANGE, MARKET TREND ANALYSIS SUMMARY OF CHART POSTING INFORMATION FOR THE PERIOD ENDING NOVEMBER 20, 2015 BUYING ‘SELLING SHORT TERM ‘DOW JONES INDUSTRIALS DATE POWER PRESSURE BUYING POWER HIGH Low. CLOSE Novt3 Up 21185 ‘Down 2to227 Level at 44 1743025 © 1723889 17245.24 Nov16 Up 510190 Down 610221 Up 4'to 48 17483.01 1721043. 17483.01 Nov17 Down 3t0187 Up 210223, Down 11to 47 17509.33 © 17451.41 1748950 Nov18 Up St0192 Down 6to217 «Up 6 to 83 1782.18 7485.49 1737.10 Nov19 Level at192 Level at217 Down 30 50 4772.97 4768198 17732.75 Nov20 Level at192 Level at217 Down 1 to 49 Not available at publishing time Nov20 4:00 P.M Approximate Vol: 3,731,461 000 Preliminary Close: 17824.35 (+91.6) ** WHAT TO WATCH FOR * SUGGESTED CONTROLS FOR APPRAISAL PURPOSES ** Price, typically, is most useful only in retrospect as a tool for identifying bear markets (e.g, ‘the S&P 500 is down, 202%, so we must be in a bear market’). In contrast, breadth, has, historically, provided advance wamings of an approaching major market top. Conventionally, breadth has long been measured by the NYSE Adv-Dee Line. At Lowry, however, we have found our Operating Companies Only (CO) Adv-Dec Line ‘more useful as a measure of common stock breadth, in that it ‘excludes all non-operating company issues, many of which are bond surrogates (preferred stocks, closed end bond funds, hybrid securities, etc.). Commonly, as a bull market ages, investors find fewer and fewer stocks trading at valuations that make them attractive candidates for buying. Eventually, this decreasing number of buy candidates becomes reflected in a lagging Adv-Dec Line, which begins to diverge from the For example, in 1998, our OCO Adv-Dee Line began to show a series of divergences from gains in the DJIA and SAP 500 in early April 1998, about four months prior to price indexes’ final highs in mid Tuly. Similarly, the OCO Adv- Deo Line peaked in June 2007, about four and one-half months before the mid Oct, final bull market highs in the DJIA and S&P S00. Most recently, the OCO Adv-Dee Line peaked in mid May and then fel far short of its May level at the market's July recovery high. In fact, while the July high in the S&P $00 was only about 2 points below its May high, the OCO Adv-Dee Line was more than 4000 points (4%) below its May peak reading. And, this deterioration has. ‘continued, That is, at the time of the recent Nov. 3" high in, the S&P 500, the OCO Adv-Dec Line was over 1000 points, ‘below its level atthe Index’s July 21* recovery high and over '5000 points below its May high. At Lowry, in addition to the Adv-Dec Lines, we have also found other metrics useful in measuring the deteriorating breadth that occurs in an aging bull market. These metrics include 52-week New Highs, stocks at or within 2% of their S2-week highs and stocks down 20% or more from their 52- week highs. ‘These metrics are especially useful differentiating stocks in portfolios that are continuing to show strength from those displaying signs of weakness. For example, from April to Oct. 2011, the market suffered a significant correction, but then quickly resumed the Dull marker, as the S&P 500 soared by 20% over the next six months to a new high. But, prior to the April high, there was, litle indication of deteriorating breadth. Between the Feb. and April 2011 rally highs, the percentage of stocks at or within 2% of their 52-week highs fell marginally, from 44% to 40%, while stocks down 20% or more showed a nominal rise from 12% to 13%. In contrast, the percentage of stocks fat or within 2% of their highs’ showed a steady drop beginning in May 2013. This deterioration accelerated as the market neared the May 2015 high, with the percentage dropping rapidly from over 35% in mid Feb. to just 18% at the time of the May 21° high. In addition, the percentage of stocks down 20% or more began to increase in mid April 2015, rising from 15% to over 25% by the May 21® high ‘The percentage has continued to rise, reaching 34% at the market's July 21" rally high and then 40% at the Nov. 3 recovery high. Short Term Considerations: A buy signal for aggressive traders was triggered Nov. 18° when the 14-day Stochastic, indicator crossed above its moving average. A conventional short term buy signal was also registered Nov. 18" when the Short Term Index rose six points above its most recent low. Both buy signals remain in place. Richard A. Dickson / Paul F. Desmond