Advance-Decline Index
A technical analysis tool representing the total difference between the number of advancing and declining security prices. It is calculated by adding the difference between the number of advancing and declining issues to the previous period's value. This index is considered one of the best indicators of market movements as a whole. Stock indexes such as the DJIA only tell us the strength of 30 stocks whereas the advance-decline index can provide much more insight.
Investopedia Commentary
In general, rising values of the advance-decline can be used to confirm the likelihood of the upward trend continuing. If the markets are up but there are more declining issues than advancing ones, it's usually a sign that the markets are losing their breadth and may be getting ready to change direction.
When this index is plotted on a chart it is known as the advance/decline line.
Related Links
Market Breadth: A Directory of Internal Indicators
Discovering the Absolute-Breadth Index and the Ulcer Index
See also: Advance/Decline Line - A/D, Breadth Indicator, Breadth of Market, Technical Analysis
advance-decline index