Monday, June 3, 2013

The NYSE Advance / Decline Line

I just returned from the Caribbean and after spending 7 days and nights on a sailboat – I am over the land sick period but I am still in the lay-back island mode.

According to – the Advance / Decline Line (AD line) One of the most widely used indicators to measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal

They say a picture is worth a thousand words so I will let my chart do the taking  The upper plot is the S&P500 and the lower plot is the NYSE A/D line which is just moving below the 20 period simple moving average. So look for some selling in the leading sectors such as those “safe” consumer discretionary and consumer staples sectors in the US and Canada.

By the way – I apologize for those ridiculous Harry Dent Dow 3300 pop-up adds - more on that later.


Anonymous said...

Sorry, I'm lost on this one, I know the importance of an AD line but I've never figured out how to plot it nor do tech. charts provide it as an option. What are you saying here? A Bear has begun? said...


A positive or negative turn on the A/D line is likely to be the early warning of a corrective period and not a new bull or bear

The A/D line is an "old" study and so is not offered on many on-line charting sites - which is good for those who use this valuable study

Bill C