"Market Breadth" Posts
Market Breadth Primer: Advance / Decline Ratio and Advance Issues Percentage Conversion
By Lawrence
Different data feeds offer different favour of the advance decline data to their customers. However, not all trading platforms are capable of letting the users to conduct calculations directly from multiple data series. Hence, odd combinations of the advance decline data are often provided as a workaround for the traders. These vendor provided ratios may […]
Trading with Tick Index: How to Normalize Tick Index Readings
By Lawrence
Many day traders who use Tick Index as part of their market timing tools often find that it changes its behaviour every few weeks. The most obvious issue is that the level of the extreme readings are not reliable / stable from day to day let along over months or years. This instability makes it […]
Market Breadth Correction Progresses To Neutral
By Lawrence
An update to my post back in mid-September pointing out that a market breadth driven correction was on the way. Here are the updated custom market breadth charts for Dow, S&P500 and Nasdaq 100. At this point the breadth overbought condition is neutralized. To form a proper market bottom, more time is needed to […]
Market Breadth Correction In Progress
By Lawrence
Following are custom market breadth charts for Dow, S&P500 and Nasdaq 100. All 3 indices have built up significant breadth overbought conditions in their 5-Day New Highs / New Lows (4th pane) and 20-Day New Highs / New Lows (5th pane). The condition has to be corrected either by sideway high volatility price moments or […]
A Robust Method To Interpret Advance Decline Issues
By Lawrence
Advance Decline Issues, by its very natural, is noisy. Its values can be jumpy from day to day making it hard to interpret the information offered by the market breadth data. I am going to demonstrate a neat way to utilize the data that overcome the weaknesses in classic advance decline issues based indicators. This […]
Market Breadth Primer: Advance Decline Line Explained
By Lawrence
Many traders have heard of Advance Decline Line. It is even reported in major financial news media. Most of the time, people focus on the divergence of the index levels against the Advance Decline Line as signals to potential trend change. This is not quite what the breadth indicator is designed for. I will explain […]
Market Breadth Primer: Advance / Decline Issues Bear Strike (Signal ID: AD Bear Strike)
By Lawrence
Advance / Decline Issues Bear Strike is a day trading model based on real-time advance / decline issues. It is a very consistent mechanical trading model and a useful trading setup for discretionary traders. Similar to the Advance / Decline Issues Bull Charge signal, AD Bear Strike takes advantage of the leading nature of the […]
Market Breadth Primer: Advance / Decline Issues Bull Charge (Signal ID: AD Bull Charge)
By Lawrence
Advance / Decline Issues Bull Charge is a day trading model based on real-time advance / decline issues only. It is not only a very consistent mechanical trading model. It is also a very useful trading setup because it helps the traders to realize that the day is different which requires special attention and considerations. […]
S&P500 20 Days New Low Bullish Reversal
By Lawrence
Here is a breadth driven trading model based on S&P500’s 20 days new low market breadth data. It is not something complex and everyone can follow easily. It performs very well with reasonable drawdown. For those who are not familiar with the concept of market breadth, please read my article series, Market Breadth Primer. 20 […]
Ready for a Pullback?
Majority of custom market breadth readings, as of yesterday (Nov 11, 2014) closing, are now back to overbought condition. Upside is now very limited within 1% while downside risk is at least 2%. Are you ready for a pullback? To see the custom market breadth charts for Dow, S&P500 and Nasdaq 100 you can visit […]