After studying this chapter, you should be able to:
Market breadth is a critical form of analysis that every practitioner should be familiar with for reliable forecasting of potential market action. It is the study of the behavior of the universe of stocks that populate the markets. It concentrates on the wider market action in contrast to the narrow focus and application of technical analysis on single stocks alone. Technical analysis on single stocks without regard to the overall market action or environment is not a particularly effective approach to reliable forecasting. In this chapter, we shall cover various market-breadth operators, associated indicators, and their technical interpretation.
Market breadth is essentially about the study of broad market action, as opposed to market depth, which focuses on the amount of supply and demand at various price levels of individual stocks. That is, it focuses on the components of overall market ...