Market Breadth Toolkit
May 14, 2025
The Market Breadth Toolkit provides traders with an extensive toolbox featuring up to 6 distinct market breadth measures across two exchanges, namely NYSE and NASDAQ, adding up to a total of 12 unique market perspectives. With its capability to detect divergences and allow customization of fixed levels, this trading indicator is designed for those keen on experimenting and optimizing their trading strategies.
How to Trade the Market Breadth Toolkit?
Market breadth is a powerful concept in trading, focusing on the evaluation of advancing versus declining issues or volume on a given exchange to gauge the market's underlying strength. Thrusts signal large market breadth impulses, often indicating the beginning of a bullish trend in the market.
The toolkit is preset to the "Breadth Thrust Zweig" with divergences activated, serving as a starting point for traders to analyze market dynamics.
Explore Market Breadth Measures
Deemer Breakaway Momentum
Market breadth took on new dimensions with Walter Deemer's introduction of "Breakaway Momentum" in the 1970s, offering insights into strong upward market momentum. According to Deemer’s insight:
We coined the term "breakaway momentum" in the 1970's to describe this REALLY powerful upward momentum.
This methodology is unveiled when the ratio of advancing to declining issues surpasses 1.97 for 10-day averages or 1.72 for 20-day averages, as visually depicted earlier.
Navigating Zweig Breadth Tools
Inspired by market maven Martin Zweig, author of "Winning on Wall Street" and creator of the Put/Call Ratio, this toolkit incorporates his additional strategies:
- Breadth Thrust: Calculated as the Number of Advancing divided by the sum of Advancing and Declining Stocks.
- Market Thrust: Establishes momentum through (Advancing minus Declining Stocks) multiplied by Volume.
The chart demonstrates a bullish Breadth Thrust signal on April 24, 2025, supported by Market Thrust readings.
Understanding Whaley Measures
Wayne Whaley’s celebrated contributions to market breadth are captured here, born from his 2010 Charles Dow Award-winning research:
- Advance Decline Thrust: Ratio of Advancing to Total of Advancing and Declining Stocks
- Up/Down Volume Thrust: Ratio of Advancing Volume to the Total Volume.
As detailed in Whaley’s research, these indicators trigger thrust signals when readings reach extremes.
Decoding Divergences
Divergence detection is a hallmark of this toolkit, enabled by default but configurable through the settings for those inclined to tweak detection parameters.
Customizing Fixed Levels
The toolkit allows for customization of Thrust detection thresholds, giving traders the liberty to experiment with new market approaches. As shown, the Deemer Breakaway Momentum displays original versus adjusted thresholds.
Configuring Market Breadth Toolkit
- Breadth Options: Select from six distinctive breadth thrust measurement methods.
- Data Selection: Toggle between NYSE and NASDAQ data.
- Divergences: Enable or disable divergences and configure detection settings.
Level Adjustment
- Fixed Levels Usage: Toggle the application of fixed levels.
- Thresholds: Set top and bottom-level thresholds and customize Levels Style with dashed, dotted, or solid visual options.
Style Customization
- Breadth Colors: Adapt the color scheme for breadth indicators.
- Divergence Colors: Change colors to better visualize divergence signals.
FAQs
How to Access the Market Breadth Toolkit?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What is the default setting of the toolkit?
The toolkit is preset to "Breadth Thrust Zweig" with divergences enabled, perfect for monitoring market shifts intuitively.
Can I modify the detection thresholds for the toolkit?
Absolutely! Traders can use the settings panel to manipulate thrust detection thresholds, exploring tailored trading strategies.
Trading is risky and many will lose money in connection with trading activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other markets involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools for charting platforms, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content or tool we provide.
Charts used on this site are by TradingView in which the majority of our tools are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com. TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2025 LuxAlgo Global, LLC.