Breadth will treat all stocks in an index equally. Stock with largest capitalization and the smallest are both equal in breadth analysis. It can be applied to any exchange or index of securities, any sector or industry group.
🧵Market Breadth 101
It is a broad approach to overall market analysis that helps traders to realize the underlying strength or weakness associated with a market move
Thanks @PradeepBonde for the blogpost & @iManasArora for making breadth tool in context of Indian Market
(1/n)
Breadth will treat all stocks in an index equally. Stock with largest capitalization and the smallest are both equal in breadth analysis. It can be applied to any exchange or index of securities, any sector or industry group.
One may consider it "oscillating indicator", when reached a threshold level, either positive or negative, they tend to reverse or take a halt.
It is concerned with probability that market is approaching a major turning point, so it isn't helpful knowing everyday trends.
Breadth is based on the price of the variables, still it can offer leading indications based upon the identification and use of previous levels or thresholds that are consistent with similar market action.
Breadth directly indicates/represents the market, no matter what the indices are doing.
Might look complex to understand it at sight. Let's try to break it down.
Link: https://t.co/nvEuNXoiZ7
Possibilities:
(B+) + (C-) :: BULLISH (+ve)
(B-) + (C+) :: BEARISH (-ve)
(B-) + (C-) :: NEUTRAL (consolidation/indecisiveness/pause)
Same can be applied to other columns as well.
Continuous "BULLISH (+ve)" or "BEARISH (-ve)" reading indicates market running out of breath and a high possibility of a pause or reversal in the trend.
Pic: (Line from the sheet, answering how to read Market Breadth Sheet)
Case: Continuous bullish readings followed by a fall (03/08/20 - 28/08/20)
Note: Indices does not represents all stocks, Market Breadth does. For instance, there is a possibility that the number of breakouts are pretty high and you don't see a good jump in indices.
Case: Continuous bearish readings (17/09/20 - 24/09/20) followed by a bounce (25/09/20 & 28/09/20)
Case: Low readings in Column B indicating weak buying pressure in the market, yet no high readings in Column C. (01/10/20 - 15/10/20).
However, you might notice a rally in #NIFTY50 during this time, watching indices and making decision based on them has its negatives.
Case: "Extreme" bearish reading of just one day (21/12/20) followed by a bounce. It doesn't necessarily require a series of negative readings for a bounce. Same works vice-versa.
This was a rare negative reading, market ran out of breath the same day itself.
Case: Continuous selling pressure of 4-5 days (21/01/21 - 27/01/21), followed by a reversal (01/02/21 - 05/02/21)
When readings are more than usual limits for a long period of time, it hints "stretched market"
Jump in Column D: "Number of stocks up 20%+ in 5 days" indicates the possibility of a momentum. Market tends to reverse/pause when its close to extreme readings.
Column D faces a resistance around 55-60 readings, it kept breaching resistance readings in every few days. (27/04/21 to 15/07/21)
Numbers went over 100 on 08/06/21, we witnessed one of the strongest run in the market during this time.
August 2021 observed correction in market, selling exhaustion was visible twice during the month and gave a bounce in both instances.
Case I: Selling pressure (04/08/21 to 11/08/21), observed a small bounce/pause. However selling pressure was not visible in #NIFTY50
Case II: Market went weak again, selling continued for 4-5 days (16/08/21 - 23/08/21), bounced back stronger this time (24/08/21 - 02/09/21)
For more cases and recent examples (Oct & Nov 2021) check out Manas Sir's notes on side of the sheet. Other columns work the similar way, try to find the extreme readings and market behaviour near them.
Blogpost by @PradeepBonde -
Link: https://t.co/Gv3ZQlLfzx
Like & retweet if you found this helpful. It was an honest attempt to break down Market Breadth tool the way I understand.
"Market Breadth Indicators" by Gregory L Morris covers other market breadth tools in detail.
Thanks to @iManasArora Sir for bringing drastic improvement in my trading journey, can't thank you enough. You have shortened my learning curve by years. Always grateful🙌
You May Also Like
So the cryptocurrency industry has basically two products, one which is relatively benign and doesn't have product market fit, and one which is malignant and does. The industry has a weird superposition of understanding this fact and (strategically?) not understanding it.
The benign product is sovereign programmable money, which is historically a niche interest of folks with a relatively clustered set of beliefs about the state, the literary merit of Snow Crash, and the utility of gold to the modern economy.
This product has narrow appeal and, accordingly, is worth about as much as everything else on a 486 sitting in someone's basement is worth.
The other product is investment scams, which have approximately the best product market fit of anything produced by humans. In no age, in no country, in no city, at no level of sophistication do people consistently say "Actually I would prefer not to get money for nothing."
This product needs the exchanges like they need oxygen, because the value of it is directly tied to having payment rails to move real currency into the ecosystem and some jurisdictional and regulatory legerdemain to stay one step ahead of the banhammer.
If everyone was holding bitcoin on the old x86 in their parents basement, we would be finding a price bottom. The problem is the risk is all pooled at a few brokerages and a network of rotten exchanges with counter party risk that makes AIG circa 2008 look like a good credit.
— Greg Wester (@gwestr) November 25, 2018
The benign product is sovereign programmable money, which is historically a niche interest of folks with a relatively clustered set of beliefs about the state, the literary merit of Snow Crash, and the utility of gold to the modern economy.
This product has narrow appeal and, accordingly, is worth about as much as everything else on a 486 sitting in someone's basement is worth.
The other product is investment scams, which have approximately the best product market fit of anything produced by humans. In no age, in no country, in no city, at no level of sophistication do people consistently say "Actually I would prefer not to get money for nothing."
This product needs the exchanges like they need oxygen, because the value of it is directly tied to having payment rails to move real currency into the ecosystem and some jurisdictional and regulatory legerdemain to stay one step ahead of the banhammer.
Fake chats claiming to be from the Irish African community are being disseminated by the far right in order to suggest that violence is imminent from #BLM supporters. This is straight out of the QAnon and Proud Boys playbook. Spread the word. Protest safely. #georgenkencho
There is co-ordination across the far right in Ireland now to stir both left and right in the hopes of creating a race war. Think critically! Fascists see the tragic killing of #georgenkencho, the grief of his community and pending investigation as a flashpoint for action.
Across Telegram, Twitter and Facebook disinformation is being peddled on the back of these tragic events. From false photographs to the tactics ofwhite supremacy, the far right is clumsily trying to drive hate against minority groups and figureheads.
Declan Ganley’s Burkean group and the incel wing of National Party (Gearóid Murphy, Mick O’Keeffe & Co.) as well as all the usuals are concerted in their efforts to demonstrate their white supremacist cred. The quiet parts are today being said out loud.
The best thing you can do is challenge disinformation and report posts where engagement isn’t appropriate. Many of these are blatantly racist posts designed to drive recruitment to NP and other Nationalist groups. By all means protest but stay safe.
There is co-ordination across the far right in Ireland now to stir both left and right in the hopes of creating a race war. Think critically! Fascists see the tragic killing of #georgenkencho, the grief of his community and pending investigation as a flashpoint for action.
Across Telegram, Twitter and Facebook disinformation is being peddled on the back of these tragic events. From false photographs to the tactics ofwhite supremacy, the far right is clumsily trying to drive hate against minority groups and figureheads.
Be aware, the images the #farright are sharing in the hopes of starting a race war, are not of the SPAR employee that was punched. They\u2019re older photos of a Everton fan. Be aware of the information you\u2019re sharing and that it may be false. Always #factcheck #GeorgeNkencho pic.twitter.com/4c9w4CMk5h
— antifa.drone (@antifa_drone) December 31, 2020
Declan Ganley’s Burkean group and the incel wing of National Party (Gearóid Murphy, Mick O’Keeffe & Co.) as well as all the usuals are concerted in their efforts to demonstrate their white supremacist cred. The quiet parts are today being said out loud.
There is a concerted effort in far-right Telegram groups to try and incite violence on street by targetting people for racist online abuse following the killing of George Nkencho
— Mark Malone (@soundmigration) January 1, 2021
This follows on and is part of a misinformation campaign to polarise communities at this time.
The best thing you can do is challenge disinformation and report posts where engagement isn’t appropriate. Many of these are blatantly racist posts designed to drive recruitment to NP and other Nationalist groups. By all means protest but stay safe.
