Market Breadth Primer: Introduction
By Lawrence
This is a long due series I promised to cover. I was waiting for a good time to gather my thoughts and summarizing them into drafts. Well there was never a good time and probably never will if I keep stalling. So here it is, first piece on the subject.
Market Breadth, also known as market internals, is the study of the stock market through statistic data collection across the traded stocks within a market. As the data collection process is different from, say, a single value summary like a general stock market index (e.g. Dow Jones Industrial Average, S&P 500 Index, etc.), the market breadth statistics can reveal important information that cannot be obtained thru the study of the indices.
In this series, I will review some of the common market breadth indicators and their usages. That should provide enough foundation for most readers not familiar with the concept.
As oppose to waste your time on the well documented generic usage on these indicators, I will focus on practical usages I find most useful for everyday trading decision making.
Other topics related to market breadth analysis will also be grouped into this series.
