Advance-Decline Net Difference

 

Another method used by market technicians is to calculate the net difference between advances and declines. Daily or weekly data can be used. The net difference between advances and declines is calculated weekly and the result is added. To smooth out the swings, a 10-week moving average is applied. Below there is an example for weekly calculations:

 

 

Date

Advances

Declines

Net Differ.

Cumulative

10-Week MA

09.06.95

1269

1457

-188

-188

 

16.06.95

1714

975

739

551

 

23.06.95

1591

1148

443

1182

 

30.06.95

1346

1348

-2

441

 

07.07.95

2032

692

1340

1338

 

14.07.95

1507

1191

316

1656

 

21.07.95

894

1875

-981

-665

 

28.07.95

1891

845

1046

65

 

04.08.95

1404

1291

113

1159

 

11.08.95

1187

1489

-302

-189

535,0

18.08.95

1624

1043

581

279

581,7

25.08.95

1486

1176

310

891

615,7

01.09.95

1656

1011

645

955

593,0

08.09.95

1903

759

1144

1789

727,8

 

  The chart went from extremely overbought in July 1997 to heavily oversold in September 1998:
 
 

TechnicalAnalysisSite.com  - Advance-Decline Line

 

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Past performance does not guarantee future results!
 
   
 




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