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Advancing and Declining Issues
(Indicators based on the "advances" and "declines" concept)
Description: technical analysis of
advance/decline issues for index trading. An example of the S&P 500 index chart
with advance/decline issues (stocks) data.
Below you may see some quotes from the "Advance/Decline
Issues" article from the tutorial on the MarketVolume's website.
"...The term 'declines' represents a cumulative (i.e.,
running) total of the number of stocks (issues) that have fallen in price
compared to their close on the previous trading day... Conversely, the term
'advances' refers to a cumulative (i.e., running) total of the number of stocks
that have risen in price compared to their close on the previous trading day...
...Advances and declines are used as a measure (indicator) of market strength or
weakness...
...Intraday charts provide
more detail and allow you to monitor actual changes in the number (and volume)
of declining and advancing issues - in real-time. This gives you an instant
snapshot of any changes in the market sentiment, exactly as they unfold..."
Chart 1. S&P 500 5-day intraday (one bar = 15 min)
Advancing and declining issues
...In technical analysis, advances and declines data are
used to assess 'market breadth'. Looking at the chart above, a technical analyst
might say that the market had 'negative breadth' from July 21-26, but that the
breadth turned positive on July 27...
...The advance - decline line: This is simply the number of
stocks that are currently trading higher (advancing issues) minus the number
of stocks currently trading lower (declining issues)... The advance / decline ratio: This ratio is derived from
dividing the number of stocks that are currently trading higher (advancing
issues) by the number of stocks that are presently trading lower (declining
issues)..."
A. v. S.
V. K.
Copyright 2004 Highlight Investments Group.
All rights reserved. This material may not be published,
broadcast, rewritten, or redistributed.
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