Measures of Market Breadth

One useful measure of market breadth lies with the advance-declme lie, a cumulative total of advancing minus declining issues on each of the various exchanges. You can start these cumulative lines from any level, using daily readings for daily-based advance-decline line readings, or weekly readings for weekly advance-decline line measurements.
For example, if you started an advance-decline line of the New York Stock Exchange at an arbitrary level of 10,000, and on the first day there were 1500 issues advancing in price on that exchange and 1,000 declig (unchanged issues are not
included), there would be 500 more issues advancing than declig that day The advance-decline (A-D) line would advance by +500 units, from 10,000 to 10,500. If there are 200 more declines than advances on the subsequent day, the A-D line would decline from 10,500 to 10,300.
We will return to applications of the advance-decline lines of various market indices, but first we take a more detailed look at the relationships of the number of issues rising to new highs and falling to new lows. This is another area that reflects the internal breadth and strength of the stock market.