Remember what I said back on March 10th about too many new lows indicating a short-term bottom for the stock market? The basic idea was that when things got downright painful, the worst was over…a bounce was nigh. Well, we may have gotten to that point on Monday, if the number of new NYSE and NASDAQ new lows we saw then was any clue. The charts tell the whole story.

The NASDAQ gave us 525 new lows on Monday…close to the levels we saw with the last few rebounds (though they each varied in size and duration)

The NYSE saw 764 new lows on Monday. That was the fourth highest reading in over a year. The last three all came in front of bounces, though only one was major.

Again, I can’t stress enough how no single tool is perfect. This new high/new low analysis works well, but only works great in light of other tools and data.

That said, the odds favored the bounce today, and Bernanke played a role too. The number of new lows said it was time for Bernanke to take action though.

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