Bad Breadth

You've surely seen the light volume and its effects on the stock market over the past period. But what about the "stock market breadth indicator?"

Is the stock market overbought or oversold?

The breadth indicators are more quantitative than the research of traditional technical analysts. The daily stock market breadth count can be formulated into a very effective indicator of overbought or oversold conditions.

Each day's indicators generates a daily percentage and by using a 10-day moving average of this percentage, we can portray a bearish pull on the market as buyers turn into sellers and the number of stocks making highs reverses as the market begins to retrace.