A/D Line Confirms Market’s Strength

11/08/2010 9:56 am EST

Focus: STRATEGIES

Thomas Aspray

, Professional Trader & Analyst

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The NYSE Advance/Decline (A/D) line, which tracks the cumulative reading of net advancing stocks minus declining stocks, closed at further new highs Friday, confirming the action in the major averages. The A/D line broke out to the upside on September 2 and has made a series of new highs over the past two months (see arrows). It is well above its uptrend. On a short-term basis, I would not be surprised to see a pullback as short covering likely contributed to Thursday’s upward surge, but a correction should be a buying opportunity.

Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.

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