Market Indicators
Market indicators are quantitative in nature and seek to interpret stock or financial index data in an attempt to forecast market moves. Most stock market indicators are created by analyzing the number of companies that have reached new highs relative to the number that created new lows, known as market breadth, since it shows where the overall trend is headed. The two most common types of market indicators are: **Market Breadth** indicators compare the number of stocks moving in the same direction as a larger trend. Market indicators are quantitative in nature and seek to interpret stock or financial index data in an attempt to forecast market moves. Market indicators are quantitative in nature and seek to interpret stock or financial index data in an attempt to forecast market moves.
What are Market Indicators?
Market indicators are quantitative in nature and seek to interpret stock or financial index data in an attempt to forecast market moves. Market indicators are a subset of technical indicators and are typically comprised of formulas and ratios. They aid investors' investment/trading decisions.
Understanding Market Indicators
Market indicators are similar to technical indicators in that both apply a statistical formula to a series of data points to draw a conclusion. The difference is that market indicators use data points from multiple securities rather than just a single security. Often times, market indicators are plotted on a separate chart rather than appearing above or below an index price chart.
Most stock market indicators are created by analyzing the number of companies that have reached new highs relative to the number that created new lows, known as market breadth, since it shows where the overall trend is headed.
The two most common types of market indicators are:
Here's an example of the NASDAQ Advance-Decline Issues index:
Image by Sabrina Jiang © Investopedia 2020
Popular Market Indicators
There are hundreds of different market indicators covering various indexes in the United States and around the world, including the NYSE, NASDAQ, AMEX, TSX, TSX-V, and various options exchanges.
Some of the most popular market indicators include:
Related terms:
Advance/Decline Line - A/D and Uses
The Advance/Decline Line (A/D) is a technical indicator that shows the number of advancing stock less the number of declining stocks. It is a breadth indicator used to show market sentiment. read more
American Stock Exchange (AMEX)
The American Stock Exchange (AMEX), now known as the NYSE American, was once the third-largest U.S. stock exchange and dates back to the 18th century. read more
Arms Index (TRIN) and Application
The Arms Index or Short-Term Trading Index, also called TRIN, is a technical analysis breadth indicator that measures the number of advancing and declining stocks and volume to provide overbought and oversold levels. read more
Bottom
A bottom is the lowest price reached by a financial security, commodity, index or economic cycle. read more
Breadth Indicator and Uses
Breadth indicators are mathematical formulas that measure the number of advancing and declining stocks, or their volume, to calculate the amount of participation in a market movement. They are used to confirm trends or warn of reversals. read more
Breadth of Market Theory
The breadth of market theory is a technical analysis method for gauging market direction and strength. read more
Froth
Froth refers to market conditions preceding an actual market bubble, where asset prices become detached from their underlying intrinsic values. read more
Market Breadth
Market breadth is a technical analysis technique that gauges the strength or weakness of moves in a major index. read more
Market Capitalization
Market capitalization is the total dollar market value of all of a company's outstanding shares. read more
McClellan Oscillator and Uses
The McClellan Oscillator is a market breadth indicator that is based on the difference between the number of advancing and declining issues on a stock exchange. The indicator is used to analyze the overall stock market and indexes. read more