Chartered Market Technician (CMT) Practice Exam 2025 - Free CMT Practice Questions and Study Guide

The New High-New Low index is a technical analysis tool used to assess market breadth by measuring the difference between the number of securities hitting new highs versus those hitting new lows over a specific period. The index is constructed primarily based on the counts of new highs and new lows in the market, focusing on the internals of the market rather than external factors such as trading volume.

The total volume of trades does not directly affect the calculation of the New High-New Low index. While trading volume is an important aspect of market analysis and can indicate the strength of trends, the New High-New Low index itself is purely an enumeration of the new highs and new lows occurring in a given time frame. Therefore, it is not influenced by the total volume of trades, making this the correct answer.

The other aspects listed, such as the number of new highs and new lows, directly contribute to the index’s calculation, whereas the period over which these highs and lows are measured provides context for the analysis and trends within that timeframe.