Market Breadth

Market breadth is a measure of the number of stocks moving with the market averages.  A move involving the majority is typically more robust than one in which a few heavily weighted stocks lift the averages.  The former is reflective of wide spread institutional activity in the market.

Various measures of breadth may be used:

  1. Percentage of stocks above 50 day moving average
  2. Bullish percent index (percentage of stocks on PnF buy signals)
  3. Percentage of stocks up 25% in one month

Stockbee has a very detailed primer on market breadth here:

http://stockbee.blogspot.ca/2011/08/how-to-use-market-breadth-to-avoid.html

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