Advance/Decline Line [IQ]

Advance/Decline Line is a Market Breath indicator.

A/D line calculates a ratio between total number stocks advancing and total number of stocks in one day, providing another way to grasp the market breath at any moment.

We think the indicator covers the whole market, as we use data from the three main exchanges: NYSE, NASDAQ and AMEX.
  • The New York Stock Exchange (NYSE), nicknamed "The Big Board") is by far the world's largest stock exchange by market capitalization of its listed companies.
  • The Nasdaq Stock Market (NASDAQ) is ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange.
  • The American Stock Exchange (AMEX) is the third largest stock exchange in the U.S. after the NYSE and the NASDAQ, and handles approximately 10% of all American trades.
How to interpret it:
Green columns mean more than 50% of NASDAQ stocks are advancing, red columns mean more than 50% of NASDAQ stocks are declining.
Green values above the top band mean correlation to the upside, red values bellow the low band mean correlation to the downside.
Correlation means rising probability of capitulation (to the upside or to the downside) and is market by a white bar (as signal).

For a better interpretation, the Advance/Decline Line indicator should be used in conjunction with other indicators (volatility, volume, etc.).

Open-source script

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