The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

THE HAndbook of TECHnICAl AnAlysIs

6. The decimalization of stock prices on the NYSE in 2002 affected the number
   of daily unchanged issues reported. This rendered past references to breadth
   data unusable and incompatible.


7. A measure of downside bias is associated with various market‐breadth indi-
   cator readings due to the replacement of individual stocks with poorer per-
   forming stocks that fail to satisfy the criteria for continued membership at an
   exchange.


8. Discrepancies in market‐breadth data between various data vendors give rise
   to incompatible readings among charting platforms. Some data vendors pro-
   vide market‐breadth data based on all stocks, while others base breadth data
   specifically on common stocks alone.


9. Many market‐breadth indicators employ a cumulative operator in their cal-
   culations, that is, current readings are added to a running total, giving rise to
   inconsistencies resulting from different commencement dates on which the
   running total is based.


10. Changes in the way market‐breadth components are calculated by the ex-
    change also affects the integrity of breadth data, as was the case in the way
    new highs and new lows were calculated prior to 1978 on the NYSE.

22.2 Components of Market Breadth

We shall now turn our attention to the components that make up the majority

of breadth indicators. Breadth components may be classified into three distinct

groups:

1. The Breadth Data Field


2. The Breadth Operators


3. The Breadth Market Field

Breadth data fields

There are nine main pieces of raw breadth data consisting of:

1. Advances (A): The daily number of issues that have risen in price


2. Declines (D): The daily number of issues that have declined in price


3. Unchanged Issues (U): The daily number of issues that have not changed in
   price


4. Total Issues (A + D + U): The total number of tradable issues at the exchange


5. New Highs (H): Issues that have reached a new 52‐week high in price


6. New Lows (L): Issues that have reached a new 52‐week low in price


7. Up Volume (UV): Total daily volume of all advancing issues


8. Down Volume (DV): Total daily volume of all declining issues


9. Total Volume (T): Total daily traded volume

Note that total volume (T) is usually used as a ratio‐adjustment parameter to

overcome the problem of changing volume of issues at an exchange.