Chapter 8. Measuring Market Strength

Chapter Objectives

By the end of this chapter, you should

• Understand the importance of measuring internal market strength

• Understand what is meant by “market breadth”

• Be familiar with how the advance-decline line measures market breadth

• Be familiar with how up and down volumes relate to market strength

• Be familiar with how new high and new low statistics measure market strength

• Be familiar with the relationship between the number of stocks above their historical moving average and market strength

Chapter Summary

Confirmation occurs when prices and a market internals indicator are moving in the same direction. When a market indicator does not support the direction of price movement, the analyst ...

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