This indicator is calculated by dividing the weekly advances and declines by the weekly total issues. If prices move steadily upward (strong uptrend) a broad number of stocks should participate. If not there is a negative divergence between the market and breadth. This could happen, if only heavy weighted stocks in an index are pushing the market higher but the majority of small weighted stocks are already being sold by investors. By separating the advancing from declining issues, investors can get an additional insight about the direction of the market. Divergences between the market and advancing issues should be monitored closely as a trend reversal could be ahead!
Bullish: Advancing issues above declining issues
Bearish: Advancing issues below declining issues
Watch out for divergences between the market and advancing issues