The Advance Decline Line is a breadth indicator based on daily net advances made on Nyse, which is the number of advancing stocks less the number of declining stocks. Net advances are positive when advances exceed declines and negative when declines exceed advances. The Advance-/Decline Line rises when there are more net advances and falls when there are more net declines. The Advance-/Decline Line should confirm an advance or decline of the S&P 500. A bullish or bearish divergence in the Advance-/Decline Line compared to the S&P 500 could lead to a trend reversal
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This center oscillator measures the advancing stocks and declining stocks on a 20 days basis. This indicator is a leading indicator as it leads the price move. The bigger the difference between the current price and the price 20 days ago, the higher the value of this oscillator. When the indicator is above 0, the percentage price change is positive (bullish). When the indicator is below 0, the percentage price change is negative (bearish). This indicator is especially reliable when a new high or low of the market is not confirmed by momentum.