The Complete Guide to Market Breadth Indicators

By Gregory L. Morris

Overview

Published in 2015, this book by Gregory L. Morris is the most comprehensive reference available on market breadth indicators. Morris, a recognized authority on technical analysis, catalogs and analyzes virtually every known breadth indicator, providing historical context, mathematical formulas, chart examples, and practical interpretation guidelines.

Key Themes and Arguments

Breadth Data Categories

The book organizes breadth indicators by their underlying data sources: advance-decline data (the number of stocks rising versus falling), new highs and new lows, up volume and down volume, and composite measures that combine multiple data types. Morris demonstrates how each data category captures a different dimension of market participation and internal strength.

Indicator Catalog

The book catalogs hundreds of individual breadth indicators, from classic measures like the Advance-Decline Line and the Arms Index (TRIN) to more obscure indicators like the McGinley AD Power, Haurlan Index, Bolton Advance-Decline Line, and Swenlin breadth indicators. For each indicator, Morris provides the mathematical formula, recommended parameters, interpretation guidelines, and historical chart examples showing the indicator's behavior during major market turning points.

Divergence Analysis

A central theme is the use of breadth divergences to identify major market turning points. Morris demonstrates how deteriorating breadth (narrowing market participation) often precedes significant market declines, providing early warning signals that price-based indicators may miss. He documents specific historical examples including the breadth deterioration that preceded the 1987 crash and the 1998 and 2000 market tops.

Adjustment for Total Issues

An important methodological contribution is Morris's emphasis on adjusting breadth data for the total number of listed issues, which has increased dramatically over time. Without this adjustment, raw breadth data produces misleading comparisons across different time periods.

Significance

As the definitive encyclopedia of market breadth indicators, this book serves as an essential reference for technical analysts who incorporate breadth analysis into their market assessment framework.