NEW LOWS exceeding 400-500 per week. . When this condition occurs it means that we should be seeing a market bottom and that the market should soon be moving upward. This indicator is used to determine what the Specialists are doing. The Specialists are people on the floor of the exchange that are in charge of maintaining an orderly market. Each Specialist may handle one or more of the stocks listed on the exchange.
Specialists are where the action is, they know what is going on by being there.
A Specialist is allowed to trade on his own behalf. This is where the Specialist Short Ratio comes in to play. The resulting difference is his profit. Since the Specialist is generally right, we use this indicator as an integral part of our market analysis tools. Every week in the Barron's Market Laboratory under Week's Market Statistics the figures for Total Short Sales and Specialist Short Sales are listed.