fbpx Breadth Oscillator Differential Signals (Preview) | Option Strategist

Breadth Oscillator Differential Signals (Preview)

By Lawrence G. McMillan

Many of our subscribers are familiar with the breadth oscillator differential buy signals that occur in deeply oversold markets – when the “stocks only” breadth oscillator falls far faster than the NYSE-based one.  But recently, in the wake of the market strength since the election, the “stocks only” breadth oscillator has risen far faster than the NYSE-based oscillator.  This is unusual.  What does it mean for the markets when this happens?  First, let’s offer a quick review of what the breadth oscillators are, and how we calculate them.

Breadth Oscillator Definitions, etc.

Breadth is a generic market statistic.  It is simply the number of advancing issues minus the number of declining issues.  One can use different subsets of data to determine those advancing and declining issues.  For example, one might use the NYSE breadth data that is the most popular – published in many places daily.  But one could determine S&P 500 breadth (using only those 500 stocks) or perhaps NASDAQ breadth (using only NASDAQ) stocks. 

The breadth oscillator is a fairly simple calculation...

Read the full feature article (published 11/18/16) by subscribing to The Option Strategist Newsletter.

The Option Strategist Newsletter $29 trial

Share this

Option Strategist
Blog Search

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.