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.
Posts
2 comments:
Grandaddy
I follow the A/D line Stock Charts.com
http://stockcharts.com/freecharts/gallery.html?$NYAD
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
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
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