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Method of Interpretation

Buy signals can be said to take place when the ten-day moving average of the NH/(NH + NL) ratio first falls to below 25% (very oversold) and then rises by approximately ten units-say, from 13% to 23%-indicating that downside breadth momentum has begun to reverse.
Buy signals also can be said to take place when the ten-day moving average of the ratio falls to below 30% (oversold) and then rises upward through the 30% level. Finally, buy signals can be said to take place if the ratio rises from below 70% to above 70%. if a buy signal is not currently in place.
Sell signals can be said to take place when the ratio falls from above 70% to below 70%, or, if you prefer, from above 80% to below 80% somewhat safer exit, though sometimes premature.
These parameters are not recommended as stand alone timing models, but more as a part of your general arsenal of indicators that can be used as a group for market analysis and forecasting.
The following, however, represents a fine set of buy or hold parameters related to new high/new low data that stands well on its own. The combinations of parameters that appear to have provided the best risk/reward ratios over the years are highlighted in the tables that follow.
These are the basic operating rules:
Buy or commit to hold existing stock positions when the ten-day average of new highs on the NYSE divided by the total of new highs and new lows reaches 90%.
Hold for as long as the ten-day average of the ratio NH/(NH + NL) remains above your choice of 90%, 8570, 80%, 75% or 70%.
Sell when the ten-day average of NH/(NH + NL) falls below the sell parameters you are employing.

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