Tuesday, December 24, 2013

Non confirmation of the NYSE advance / decline line:

Just to review a clip from the Getting Technical market letter - Interim Update December 4, 2013 GT1417 – page 2 – “A Probable Short Trading Correction”

“The Advance / Decline Line (AD line) is 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.

Clearly that observation was 20 days ago – and now here we are with the S&P500 at all time highs and the NYSE A/D line (see chart) still not confirming the recent advance. This is a sign of thinning leadership.  Reducing into the current bullish stampede may be prudent.


Anonymous said...


I follow the A/D line Stock Charts.com


It shows the A/D line breaking out to new highs today.

I am not trying to be a "smarty", just a little confused. Really enjoy your work.

Andy of Ottawa

Gettingtechnical.com said...

Hi Andy

Yes the NYAD line is at new highs but the break is not decisive - it lacks the price magnitude of the S&P - so it could be a false move - we will know next week

Bill C