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Tag: market breadth

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Stock market breadth, often called market internals by financial media, refers to analysis of the number of up stocks vs. down stocks to get an idea of the market strength or weakness instead of whether the market price is up or down. But why is this way of looking at the market direction important?

Some people are looking at the broad markets right now and seeing possible resistance to higher prices, based on the fact that we’re right back where we were in April/May of this year. I see news stories talking about how the S&P is at a two year high.

Buy low, sell high – right? Doesn’t this mean we’re at the “high”?

Concept of Market Breadth

Posted by investingadventures on January 7th, 2008

As I learn every day I trade, today I learned about market breadth and how it can affect the markets during the day and potentially the following day. Thanks to my trading platform, thinkorswim, and their chat room with the shadowtrader, I learned how to analyze market breadth and how it can impact tomorrow’s open. Here’s the setup I was taught to analyze market breadth on the fly:

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