Wednesday, December 24, 2008

Using Breadth Indicators for Confirmation

In the chart above, we have the Difference between Advancing Issues and Declining Issues for the S&P 500 Index, NYSE and the NASDAQ 100. Below is the Difference between Advancing and Declining Issues for all US Stocks. As the ES futures was testing the high just after 1030 ET, only the S&P 500 Index breadth indicator was making a new high. All others were lagging thus not confirming a bullish move.

As the market declined later in the day, all indicators were in agreement to further weakness as the futures tested previous lows.


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