The complete guide to Market Breadth Indicators PDF

The complete guide to Market Breadth Indicators PDF 2nd edition (Using market breadth to analyze and evaluate the market) is the most comprehensive and vivid collection available of market breadth indicator information and features ideas and insights from market veterans including John Murphy, Don Beasley, Jim Miekka, Tom and Sherman McClellan, and numerous others.

Category: Stock

Author: Gregory L. Morris

Language: English

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Introduction

“The noblest pleasure is the joy of understanding.” Leonardo da Vinci

How can you even begin to predict or forecast the market if you are not using the correct tools to determine its present state? If you do not fully grasp the present state of the market, your prediction, whether real or anticipated, will be off by an amount equivalent to at least the error of your current analysis. And your error will be compounded based upon the timeframe of your prediction or forecast.

Breadth analysis is like quantum mechanics, it does not predict a single definite result, instead it predicts a number of different possible outcomes, and tells us how likely each one will be. Breadth directly represents the market, no matter what the indices are doing. It is the footprint of the market and the best measure of the market’s liquidity.

Market breadth indicators are those indicators that are sometimes referred to as broad market indicators. Probably the simplest way to think of them is to realize they generally do not refer to, or use information relating to an individual issue.

Breadth will treat all stocks in an index equally. The stock with the largest capitalization and the smallest are both equal in breadth analysis. Most breadth analysis is total market related in that it deals with the complete market. A rising tide raises all ships is the more picturesque way to grasp its meaning.

Market breadth uses market data such as advancing and declining issues, new highs and new lows, up and down volume, etc. This is an area of market analysis that deals only with the stock market and does so in a generic way. It cannot be used on individual stocks, mutual funds, or futures. It is a broad approach to overall market analysis that helps investors and traders realize the underlying strength or weakness associated with a market move. The analysis normally is done on the New York market, the American stock exchange market, and the Nasdaq market, but can be applied to any exchange or index of securities for which breadth data is available.

Actually, breadth calculations can be accomplished on any sector of the market or industry group as long as you have a method of determining the components mentioned above. I’m quite certain that with the explosive use of computers for analysis, this is just around the corner, if not already being done in some places.

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Market breadth indicators, i.e. advance/decline, new high/new low, or up/down volume, allow technical analysts and traders to look beneath the surface of a market to quantify the underlying strength or direction associated with a market move. Increasingly popular in all types of markets, they give traders the ability to accurately forecast a number of possible outcomes and the likelihood of each.

Bottom line? For gauging the near-term direction and strength of a market, breadth indicators are among the single most valuable tools a trader can use.

The Complete Guide to Market Breadth Indicators is the most comprehensive and vivid collection available of market breadth indicator information and features ideas and insights from market veterans including John Murphy, Don Beasley, Jim Miekka, Tom and Sherman McClellan, and numerous others. Chapters are first categorized based upon the mathematical relationship between the breadth pairs. Each indicator is then analyzed to provide information including:

Also known as–other names by which the indicator is recognized
Author/creator–when available
Data components required–components of breadth data required to calculate the indicator
Description--brief description of the indicator
Interpretation–generally accepted industry interpretation of the indicator, with techniques of different analysts also discussed
Chart--Chart or charts that best display the indicator
Author comments–Greg Morris’s personal interpretation, opinion, and use of the indicator, along with suggested modifications, complementary indicators, and more
Formula--An algebraic formula for the indicator or, for formulae that are too complex for this section, a descriptive narrative on the formula
References–An indicator-specific bibliography for additional information on the indicator or its creator, with notes about a particular book or magazine article

Breadth analysis is one of the purest measures of market liquidity. Applicable to virtually any exchange or index of securities for which breadth data is available, it represents the best available footprint of the health and near-term direction of the overall market examined. The complete guide to Market Breadth Indicators PDF is the first book to delve into the use, mathematics, and interpretation of the most popular and proven of these tools, and is an invaluable reference for technical traders and investors of all types, and in every market.

Table of Contents- The complete guide to Market Breadth Indicators PDF (2nd edition)

Chapter 1 – INTRODUCTION

Chapter 2 – NECESSARY BREADTH INFORMATION

Chapter 3 – BREADTH INDICATORS

Chapter 4 – Advance Decline Difference Indicators

Chapter 5 – Advance Decline Ratio Indicators

Chapter 6 – Advance Decline Miscellaneous

Chapter 7 – New High New Low Indicators

Chapter 8 – Up Volume Down Volume Indicators

Chapter 9 – Composite Indicators

Chapter 10 – The McClellan Indicators

Chapter 11 – Non-Internal Breadth Indicators

Chapter 12 – CONCLUSIONS

Reviews

“This book should be called the Encyclopedia of Market Breadth because it includes every form of market breadth known to man. A must for any serious student of this important and overlooked subject.”
–Martin Pring, Author, Technical Analysis Explained

“In The Complete Guide to Market Breadth Indicators, Greg Morris passes along his many years of experience, describing the market breadth indicators that he finds most effective.”
–Sherman McClellan, Publisher, The McClellan Market Report

“The most comprehensive study of breadth I’ve ever seen. Here, in one place, you get, literally, all the indicators that study the market’s innards. All serious technicians will want this book on their shelves.”
–John Sweeney, Former Technical Editor, Technical Analysis of Stocks & Commodities

“This is clearly the definitive work on breadth. From basic to advanced applications, Greg Morris has included it all in this book–including thoughts on the continuing validity of the data.”
–Larry McMillan, Author of Options as a Strategic Investment, McMillan on Options, and Profit with Options

“Rich in detail yet easy to digest and understand. Greg Morris has left no stone unturned in writing what is clearly the leading resource on stock market breadth.”
–Tim Hayes, CMT, Chief Investment Strategist, Ned Davis Research

“Greg Morris has done a great job of assembling a large variety of indicators based on market breadth data. More importantly, he has illustrated why breadth data is so important to market analysis.”
–Tom McClellan, Editor, The McClellan Market Report

About the author

Gregory L. Morris currently works as a consultant in the field of technical analysis and money management. Greg has been a technical market analysis for over 40 years and is enjoying semi-retired life. Greg has finished the updating of his “The Complete Guide to Market Breadth Indicators” book, writing a blog for StockCharts.com, and playing lots of golf.

Retiring in December, 2014, Greg was the Sr. Vice President, Chief Technical Analyst, and Chairman of the Investment Committee for Stadion Money Management, LLC. He still serves as the chairman of the Station Trust Board.

Greg educates institutional and individual clients on the merits of technical analysis and why he utilizes a technical rules-based trend-following model. From 2006 to 2014, Greg oversaw the management of over $5.5 Billion in assets in six mutual funds, separate accounts, and retirement plans. From December, 2003 to May, 2005, Greg served as a Trustee and advisor to the MurphyMorris ETF Fund. He also served as Treasurer and Chief Executive Officer of MurphyMorris Money Management Co, the Advisor to the Fund.

Gregory L. Morris is a consultant and cofounder and former CEO of MurphyMorris, Inc., which was acquired by StockCharts.com. The developer of candlestick filtering and a globally acknowledged expert and lecturer on candlesticks, Morris wrote the seminal Candlestick Charting Explained and has written a number of investment-related articles. He is a graduate of the Navy Fighter “Top Gun” School and retired in 2004 after twenty-six years as a captain for a major international airline.

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