How to use breadth to determine market conditions | stockbee


How to use breadth to determine market conditions

Ample warning from breadth . November last week signalled breadth weakness and since then market has had trouble going up.

Market Breadth is study of number of stocks participating in up or down move. When you see breadth deteriorating and high volume selling it indicates likelihood of short setups working . When market turns breadth turns , if market were to start rallying , breadth trends will first quickly turn from negative to positive.

Positive and negative moves in market start with breadth thrust. If you study historical breadth thrusts you will notice that at turns in short time window lot of buying or selling happens.

There are many ways to monitor breadth and there are hundreds of breadth based indicators and some very well known breadth models. If you want to be on right side of the move and avoid large drawdowns incorporating breadth in your trading plan will help you.

As we are for last few weeks in down trend shorts have worked.

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