Because we cannot get a chart of the a/d ratio it is more useful as a number. Since these two have charts, it is useful to see how things change over time. The inverse is true for bearish conditions, but anything too close to 0 is no signal at all. This is the most basic indicator here and forms the basis for the subject at hand.Ī reading of +800 or so means stocks are advancing roughly 2 to 1, which can be a good signal. Rallies and steep drops will begin to pull more and more stocks up/down as the day wears on. Naturally, you will likely find choppier days closer to 0. If the Nasdaq is up today, how many stocks are pushing it up? Is it a broad-based rally or is a green day the result of only a small portion of the market. The $ADDC and the ratio of advancing ($ADVN) to declining ($DECN) issues give us market breadth. Since there are a limited number of stocks in the composites, this metric has a cap. If 1800 stocks are positive for the day and 500 are down, you'll get a reading of 1300. This internal shows you the total number of advancing vs declining stocks in the NYSE or Nasdaq Composite. Advance/Decline Difference and Ratio - $ADDC (NYSE), $ADSPDC (S&P) or $ADQDC (NQ)
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