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This item creates a market breadth indicator called Percentage of new highs to total market. The composite uses the number of stocks making new 52-week highs that are downloaded by the following object NYSE, AMEX and NASDAQ 52-week high and low data.
The Percentage of new highs to total market is calculated by dividing the number of stocks with new highs by the total number of stocks listed in the following U.S. Exchanges: New York Stock Exchange and NASDA.
The item requires also the Advance-Decline-Unchanged issues for NYSE, AMEX and NASDAQ object, which is used to calculate the daily total number of stocks that are listed in major U.S. markets. To get the total number of stocks for each trading day, I simply added the number of advancing and unchanged stocks to the number of declining stocks for the NYSE and NASDAQ exchanges. The advance-decline volume data can also be used to calculate the total number of stocks.
The values of the market breadth indicator cannot be lower than zero. The indicator is used to gauge the market; an increasing value is bullish and it indicates that more stocks are making new highs. A decreasing value is bearish and it indicates that fewer stocks are making new highs.
This indicator does not use the number of stocks making new 52-Week lows, however you can calculate the percentage of new lows to total market composite by replacing the first line:
var1 = Ticker("^52-WEEK-HIGHS-NYSE", close, Zero) + Ticker("^52-WEEK-HIGHS-NASDAQ", close, Zero);
With the following formula:
var1 = Ticker("^52-WEEK-LOWS-NYSE", close, Zero) + Ticker("^52-WEEK-LOWS-NASDAQ", close, Zero);
The composite symbol name is "_New_Highs_Total_Market".
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
