Absolute Breadth (AB)

Author
Norman G. Fosback

Reference
Book Stock Market Logic [Amazon.com]
by Norman G. Fosback; Dearborn Trade. ISBN:0793111862

Abstract
Provides bullish signal when a large number of issue are advancing, versus a bearish signal when a large number of issues are declining.

Calculation is a simple ratio of the absolute value of the difference between the advancing and declining issues to total issues traded:

Fosback propose that an absolute breadth index above 40% indicates a bullish market while a value under 15% is bearish.

The absolute breadth index is often calculated using the advances-declines of the New York Stock Exchange (NYSE) but the same principle can be applied to any group of issues.

Interpretation / Algorithm
Absolute Breadth Index and the Ulcer Index by Shaun Taylor [investopedia.com]
Description with math formula [FMLabs.com]
Technical Analysis A to Z by Steven B. Achelis [equis.com]

Related Links
Technical analysis of industry groups by Richard K. Carlin [TASC Store]