What happens to breadth at turns | stockbee


What happens to breadth at turns

A breadth thrust starts new up or down move. A breadth thrust is rapid and dramatic improvement in breadth in short 2 to 3 days periods.

Yesterday we had 531 stocks up 4% plus on high volume. An average up day will have around 100 stocks up 4%. So yesterday was 5 times the average. If we get another big day like this in next 2 days it will change the breadth trends from negative to positive. Many times turns can have over 1500 stocks up 4% plus in just couple of days.

Big breadth thrusts are seen at most turning point and show buying pressure. Big breadth thrusts after a multi day drop in markets can be first sign of buyers stepping in big.

But in a protracted bear markets like we saw in 2008 to 2009 , there can be many big  up days that go nowhere.

Breadth thrust are very commonly used tools by traders to time market turns. Again if you skillfully use them then you can develop an edge. They give you early signal during turns.  

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