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Technical Analysis: Power Tools for Active Investors by Gerald Appel

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Measures of Market Breadth

One useful measure of market breadth lies with the advance-decline line, a cumulative total of advancing minus declining issues on each of the various exchanges. You can start these cumulative lines from any level, using daily readings for daily-based advance-decline line readings, or weekly readings for weekly advance-decline line measurements.

For example, if you started an advance-decline line of the New York Stock Exchange at an arbitrary level of 10,000, and on the first day there were 1,500 issues advancing in price on that exchange and 1,000 declining (unchanged issues are not included), there would be 500 more issues advancing than declining that day. The advance-decline (A-D) line would advance by +500 units, ...

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