Breadth Indicators NYSE Percent Above Moving Average

The Breadth Indicators NYSE Percent Above Moving Average indicator tracks and visualizes market breadth data by calculating the percentage of stocks within major indices trading above specific moving averages. This tool is essential for assessing internal market strength, identifying overbought or oversold conditions, and confirming the sustainability of broader market trends across the NYSE, S&P 500, Nasdaq, Dow Jones, and Russell indices.

Usage

The Usage section describes how the script can be used to gauge market sentiment and health. By analyzing the "Percent Above Moving Average" (PAMA), traders can identify whether a market rally is broad-based or driven by only a few heavy-weight stocks.

• Trend Identification: A common strategy involves using a long-term breadth reading (e.g., Percent Above 150-day EMA) to establish the market bias. Readings consistently above 52.5% suggest a bullish environment, while readings below 47.5% indicate a bearish tone.
• Mean Reversion and Pullbacks: Short-term breadth indicators, such as the 5-day EMA of the PAMA, help identify exhaustion points. A move below 40 often signals a short-term pullback within an uptrend, whereas a move above 60 suggests a bounce within a downtrend.
• Trend Resumption: After a breadth pullback, a move back above the 50% level can serve as a confirmation signal that the underlying trend is resuming with improved participation.

Details

The script retrieves processed breadth data for several major indices including the NYSE, S&P 500, Nasdaq, Dow Jones Industrial Average, Russell 1000, Russell 2000, and Russell 3000. It utilizes the request.security function to pull specific breadth symbols (e.g., "MMFI" for NYSE stocks above their 50-day SMA).

The indicator provides various moving average lookback periods for these breadth metrics: 5, 20, 50, 100, 150, and 200 days. By default, it features visual zones to highlight extreme conditions:

• Green Zones (0-33%): Indicate heavily oversold conditions where a large majority of stocks are below their moving averages.
• Red Zones (70-100%): Indicate overbought conditions where the market may be overextended.
• Centerline (50%): Acts as the primary pivot point for determining the balance of power between bullish and bearish participation.

Settings

• Line low/50-50/high: Adjusts the horizontal reference levels used for visual orientation on the oscillator.
• Show EMA [Period] [Index]: A series of boolean toggles grouped by index (NYSE, SPX, NASDAQ, DOW, RUSSELL) that allow the user to display or hide specific breadth timeframes.
• Grouped Sectors: Settings are organized into groups (e.g., "sectop SPX") to allow users to focus on specific indices without cluttering the chart.

FAQ

How do I interpret a reading above 50%? A reading above 50% means that more than half of the stocks in that specific index are trading above the selected moving average, which generally indicates healthy market participation and a bullish bias.

Can I use this for short-term trading? Yes, by enabling the 5-day or 20-day EMA settings, you can identify short-term momentum shifts and potential exhaustion points in the market.

How can I access this indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.