Advance Decline Line
The Advance Decline is used to gauge the overall market or the broader market. If it is moving higher, then more stocks are rising in value (advances) than are stocks declining in value (declines). If the advance decline line is moving lower, then more stocks are declining (a declining market trend) than are advancing.
This figure is calculated by taking the number of issues advancing on the New York Stock Exchange and subtracting the number of stocks declining on the New York Stock Exchange. An accumulation is made for all of the history that you have in your history files.
The main thing to watch with this indicator is a divergence between the movement of the DJIA and the A-D line. If the DJIA is moving higher and the A-D line is moving lower there is said to be an erosion of support for the DJIA and a correction should ensue.
In order to calculate this component of the display you must have two history files, NYSE Daily Advances and the NYSE Daily Declines. These figures can be entered daily either manually or through the Automatic History Update routine.
You can find these figures in the business section of your daily newspaper. All you need for each figure is the date and the number of advances or declines (entered in the closing price field).
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