Kirkpatrick and Dahlquist CMT1 Chapter 8

Chapter 8: Measuring Market Strength

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• Chapter Objectives
  • Understand the importance of measuring internal market strength
  • Understand what is meant by market breadth
  • Be familiar with how the advance-decline line measures market breadth
  • Be familiar with how up and down volumes relate to market strength
  • Be familiar with how new high and new low statistics measure market strength
  • Be familiar with the relationship between the number of stocks above their historical moving average and market strength
• Importance of measuring internal market strength
• Market Breadth
  • The Breadth Line or Advance-Decline Line
  • Double Negative Divergence
  • Traditional Advance-Decline Methods That No Longer Are Profitable
    • Advance-decline line moving average
    • One-day change in advance-decline line
  • Advance-Decline Line to Its 32-Week Simple Moving Average
  • Breadth Differences
    • Haurlan Index
    • McClellan Oscillator
    • McClellan Ratio-Adjusted Oscillator
    • McClellan Summation Index
    • Plurality Index
    • Absolute Breadth Index
    • Unchanged Issues Index
  • Breadth Ratios
    • Advance-Decline Ratio
    • Breadth Thrust
  • Summary of Breadth Indicators
• Up and Down Volume Indicators
  • The Arms Index
  • Modified Arms Index
  • Ninety Percent Downside Days (NPDD)
  • 10-to-1 Up Volume Days and 9-to-1 Down Volume Days
• Net New Highs and Net New Lows
  • New Highs Versus New Lows
  • High Low Logic Index
  • Hindenburg Omen
• Using Moving Averages
  • Number of Stocks above Their 30-Week Moving Average
    • The 80/60 Rule
• Very Short-Term Indicators
  • Breadth and New Highs to New Lows
  • Net Ticks
• Conclusion
• Review Questions

Proceed to Chapter 9: Temporal Patterns and Cycles (in Kirkpatrick and Dahlquist)

Chapter list for Kirkpatrick and Dahlquist