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Following is part of my correspondence I had with a prospective subscriber. The comments below about un-availability of volume computations do not apply as I've added the up/down/total volume already.

As far as the theory is concerned, I guess one can google the terms 'McClellan', 'breadth', 'advancing/declining', etc. and find out the theory behind it. I'm sure books must have been written about this.

If I were to put it *very* simply, I'll say that it is quite impossible for a group of securities to continue going down, or up, for an extended period of time. The reversion-to-mean has to kick-in. The breadth analysis makes an *effort* to find out just when this inevitable RTM will kick-in.

Commonly used indicators such as Relative Strength Index, Stochastics, Chande Momentum Oscillator, Commodity Channel Index etc. focus only on the Price (NAV) action. They, in general, tend to ignore the *collectivity* of a group of security for something like how many stocks in this group went up and how many went down. That IMO is another piece of this puzzle. If one believes in the theory that 'as a group' all the stocks cannot consistently go down or up, then that perhaps is proof enough that this issue needs close examination. (And when one is dealing with a group of securities such as a mutual fund or an ETF, then the usefulness of this is beyond doubt.)

(Another non-price factor is tracking money flow. I do that via Commitment-Of-Traders, and Asset-Under-Management for ETFs. One more non-price factor is volume. At this point, Breadth.BIZ is not capable of giving out volume breadth, however if I get sufficient paid subscribers, then I'll look into making volume available as well.)

As far as the raw calculation of how to compute breadth, please see the link given on Breadth.BIZ site. I encourage you to post such questions on our free bulletin board. Who knows perhaps folks more learned that I will participate/answer.

As far as the direction/divergence (Disha/DigBheda Sanskrit words) is concerned, this is my own research. It is commonly accepted that when there is a divergence between Price (NAV) and Indicator (no matter which) either the Price (NAV) has to give in or the Indicator has to. That's when in fact the 'oscillator' nature of a typical unbounded indicator (such as McClellan/CCI/CMO) kicks in. (The bounded indicators such as RSI/Stoch are not of much help here.) The oscillator has to (by defnition) oscillate and to comply, ultimately the price (NAV) has to. There is no choice here for the Price (NAV).



The traders/chartists often like to get the breadth of an index or a group of securities. Typically they like to look at the breadth of NYSE / NASDAQ / AMEX / Russell 2000 etc. This site will provide breadth for such widely used indices, as well as for other groups of securities such as simulated exchange-traded-funds (ETFs). Going a step further, this site will also provide direction / divergence between the respective simulated-ETFs and their corresponding McClellan Oscillators.

The analysis will be provided in 2 file formats:
  • Comma-Seperated-Files (Tabbed .CSV)
  • FastTrack compatible files (.FNU)




The details of what's available right now are as below ===>
Zip files:
  • WIR.zip - Wireless
  • SEM.zip - Semi-Conductors
  • RTL.zip - Retail
  • RIT.zip - REIT
  • PHZ.zip - Pharma
  • OIL.zip - Oil
  • NDX.zip - Nasdaq 100
  • GLD.zip - Gold
  • DJI.zip - Dow Jones Indistrial Average
Each of the zip contains files in the following naming format ===>
  • xxxAD.FNU - Advancing Issues
  • xxxDC.FNU - Declining Issues
  • xxxUC.FNU - Unchanged Issues
  • xxxMC.FNU - McClellan Oscillator
  • xxxNH.FNU - New Highs
  • xxxNL.FNU - New Lows
  • xxxDD.TXT - Direction/Divergence Analysis
The analysis direction/divergence will be provided in 1 file format:
  • TXT - text file

Some of the examples of breadth and direction/divergence that gave actionable intelligence, which I used for trading recently are:
Click here for pricing and click here for understanding the calculation involved.


The breadth for the following indices will be available.
  1. S&P 500 (SPX)
  2. S&P 400 (MID)
  3. S&P 600 (SML)
  4. Russell 1000 (RU1)
  5. Russell 2000 (RU2)
  6. Dow Jones Industrial Average (DJI)
  7. Nasdaq 100 (NDX)

And the breadth for following *simulated* ETFs will be available:
  1. Pharmaceutical Holders (PPH)
  2. B2B Internet Holders (BHH)
  3. Software Holders (SWH)
  4. Internet Architecture Holders (IAH)
  5. Telecom Holders (TTH)
  6. Internet Infrastructure Holders (IIH)
  7. Semiconductor Holders (SMH)
  8. Regional Bank Holders (RKH)
  9. Oil Services Holders (OIH)
  10. Broadband Holders (BDH)
  11. Biotech Holders (BBH)
  12. Wireless Holders (WMH)
  13. Internet Holders (HHH)
  14. Retail Holders (RTH)
  15. Utilities Holders (UTH)



Copyright © 2005 Salil V Gangal, All Rights Reserved.