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The Definitive Guide to Point and Figure: A Comprehensive Guide to the Theory and Practical Use of the Point and Figure Charting Method by Jeremy du Plessis

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Chapter 9: Point and Figure’s Contribution to Market Breadth

Introduction

Market breadth indicators are so called because they measure the action of a group of instruments, such as constituents of an index, rather than the market index itself. Traditionally market breadth has been used to analyse equity markets, but you will see that it is possible to use these powerful indicators on any group of instruments, such as a group of exchange rates or commodities, provided there is some commonality between them.

The basis of all market breadth indicators is that they are calculated using the number of instruments that have fulfilled some predetermined condition. Every day, therefore, the number of instruments fulfilling the condition is totalled ...

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