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Market Breadth

Market breadth is determined by tracking the number of companies advancing (rising stock price) versus the number of companies declining (falling stock price).

On we use a cumulative calculation applied to the advance decline ratio chart to better see the trend.

Market breadth indicator for the Nasdaq.

A cumulative calculation creates a running total of the values for market breadth. The cumulative calculation adds the periodic value when positive and subtracts the periodic value when negative. The cumulative line is best suited for breadth indicators that fluctuate above/below the zero line on a regular basis.

Traders should know that exchanges do not publish market breadth data themselves. It is left up to the data providers like The exception to this is the Common Only A-D numbers generated by the NYSE (which formerly were available on the NYSE web site a day later). The differences you see in market breadth data are because of the different databases and datafeeds run by different stock market data vendors. In order to calculate advancing and declining issues, a data vendor must first know what stocks are traded on the exchange. A data vendor must know the price at which each stock closed yesterday. The data provider must know the current price of each stock and be able to compare that to yesterday’s close to determine if a stock counts as an advancer or decliner.

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