Breadth of Market Theory

DEFINITION of 'Breadth of Market Theory'

A technical analysis theory that predicts the strength of the market according to the number of stocks that advance or decline in a particular trading day.

BREAKING DOWN 'Breadth of Market Theory'

The breadth of market indicator is used to gauge the number of stocks advancing and declining for the day. If the breadth indicator is strong, this theory predicts that the market will be rising and vice versa.