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Chart

 

From Merrill Lynch’s technical team:

The Most Active A-D line breaks to new highs
The Most Active Advance-Decline (A-D) line is a market breadth indicator of the daily top 15 most active stocks by share volume in the US. These stocks are generally more liquid with larger market caps where the trading is dominated by institutional investors. The Most Active A-D line has moved to new highs, which is bullish for the US equity market. This is similar to the breakout for the Most Active A-D line in late April (Chart Talk, 30 April 2013) and confirms the strength in the stocks only A-D lines (Chart Talk, 10 July 2013).

In addition, unlike the S&P 500, the Most Active A-D line did not break the uptrend line from last November. Strong market breadth supports the case for a continued US equity market rally. See Market Analysis Comment, 09 July 2013 and Chart Talk, 10 July 2013 for more details and key technical levels for the S&P 500.

 

Source:
Most Active A-D line: new highs & uptrend line from Nov intact
Stephen Suttmeier and Jue Xiong
Bank of America Merrill Lynch, July 11, 2013

Category: Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Advance Declines Break Out to New Highs”

  1. gloeschi says:

    Why not use NYSE A/D? (hint: because it hasn’t made a new high) -> confirmation bias

    • Because:
      a) “Chart Talk” has been running most active chart for 3 years;
      b) It is newsworthy when any index or major technical analysis measure makes a new high;
      c) Their stock universe are the 500 S&P companies which were the focus of the next 11 pages of the report — I just pulled the chart of the first page.

      I appreciate the insidious nature of various biases in our wetware — and I want readers to keep pushing back on anything that remotely looks like bullish or bearish bias in action.

      • quadrillion.me says:

        Barry,
        One of the strategies in ‘Thinking Fast and Slow’ is to encourage others to identify biases, because when it comes to biases ‘we are our own worst enemies’.

        Hope you take ‘biases’ suggestion openly. (I see a hint of defensiveness :)

      • What you see is the annoyance of swatting away the jackasses, haters & DBags.

        The details are here: comment policies

  2. chartist says:

    I love how the RUT is making a new high. How about that rising wedge breakout on the RUT monthly chart? Anyway, if the SPX makes a new high, it will likely result in a divergence with the weekly MACD. The monthly MACD for the SPX is at nosebleed levels. I think we’re going to put in our highs for the year sometime early August. CAT has legs to 94 with this chart breakout. I can envision an SPX move to 1730 followed by a serious swoon to 1630….It will be painful for the bandwagon jumpers.

  3. dvdpenn says:

    Started nibbling on some TZA calls. Too oversold to resist a little taste.

  4. leopardtrader says:

    A/D like any other indicator is just useless. These are simply some mathematical transformation of old data which offer zero lead. Most times chartists are subjective with their non-scientific tools. They usually fail to take as much data into consideration and confuse investors by opining that some sort of formula have anything to do with it. Imo that is cheer laziness to believe that some formula could somehow make you rich consistently or as a biz model.

  5. [...] reader took exception with this, suggesting that its a case of bullish confirmation bias. I disagreed for [...]