The Advance Decline Volume Line is a breadth indicator based on weekly net volume, which is the volume of advancing stocks less the volume of declining stocks. Net advancing volume is positive when advancing volume exceeds declining volume and negative when declining volume exceed advancing volume. The Advance-/Decline Volume Line rises when there is more net advancing volume and falls when there is more net declining volume. The Advance-/Decline Volume Line should confirm an advance or decline of the S&P 500. A bullish or bearish divergence in the Advance-/Decline Volume Line compared to the S&P 500 could lead to a trend reversal.
Bullish: If the Advance-/Decline Volume Line is making a new high or is not dropping as low as the market
Bearish: If the market is making a new high which is not confirmed by the Advance-/Decline Volume Line
Divergences between the market and the Advance-/Decline Volume Line should be monitored closely