Advances And Declines


DEFINITION of 'Advances And Declines'

The number of stocks that closed at a higher price than the previous day's close, and the number of stocks that closed at a lower price than the previous day's close. Technical analysts looks at advances and declines to analyze the overall behavior of the stock market, in order to discern volatility and to predict whether a price trend is likely to continue or reverse. Typically, a market will be more bullish if more stocks advance than decline.

BREAKING DOWN 'Advances And Declines'

Advances and declines form the basis of analytical tools like the advance-decline ratio, the advance-decline index and the absolute breath index. For example, a low advance-decline ratio can indicate an oversold market, while a high advance-decline ratio can signal an overbought market. Either of these conditions could mean that a market trend has become unsustainable and is about to reverse.

  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  2. Absolute Breadth Index - ABI

    A market indicator used to determine volatility levels in the ...
  3. Stochastic Oscillator

    A technical momentum indicator that compares a security's closing ...
  4. Divergence

    When the price of an asset and an indicator, index or other related ...
  5. Advance/Decline Index

    A technical analysis tool that represents the total difference ...
  6. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, ...
Related Articles
  1. Technical Indicators

    Discovering the Absolute-Breadth Index and the Ulcer Index

    It's time to acquaint yourself with these lesser-known yet effective technical indicators.
  2. Active Trading Fundamentals

    Market Breadth: A Directory Of Internal Indicators

    Discover the indicators that measure the force of the bulls and bears, telling you what a simple price chart cannot.
  3. Chart Advisor

    ChartAdvisor for November 27 2015

    Weekly technical summary of the major U.S. indexes.
  4. Investing

    Where the Price is Right for Dividends

    There are two broad schools of thought for equity income investing: The first pays the highest dividend yields and the second focuses on healthy yields.
  5. Chart Advisor

    Pay Attention To These Stock Patterns Playing Out

    The stocks are all moving different types of patterns. A breakout could signal a major price move in the trending direction, or it could reverse the trend.
  6. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
  7. Chart Advisor

    Copper Continues Its Descent

    Copper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
  8. Technical Indicators

    Using Pivot Points For Predictions

    Learn one of the most common methods of finding support and resistance levels.
  9. Chart Advisor

    Watch These Stocks for Breakouts

    These four stocks are moving within price patterns of various size, shape and duration, and are worth watching for a breakout
  10. Chart Advisor

    ChartAdvisor for November 20 2015

    Weekly technical summary of the major U.S. indexes.
  1. What are the main signals traders use from an Advance/Decline ratio?

    Traders and technical analysts use the terms "advances" and "declines" to describe the number of stocks that close higher ... Read Full Answer >>
  2. How is the Arms Index (TRIN) calculated?

    The Arms Index, sometimes referred to as the TRading INdex or TRIN, is a breadth indicator developed by trader Richard Arms ... Read Full Answer >>
  3. How can I use market breadth to my advantage?

    Market breadth is a study that compares the number of companies on a given exchange that have created new 52-week highs to ... Read Full Answer >>
  4. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
  5. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
  6. Point and Figure Charting Using Count Analysis

    Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  4. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  5. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  6. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
Trading Center