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Market Confirmation Using Outperformance Breadth

Market Confirmation Using Outperformance Breadth

Aired On

Oct / 25 / 2022
12:00 pm - EDT
Dan Chin
Ned Davis Research

Moving average breadth may lag index returns during market corrections if individual stock prices are far above their moving averages. Outperformance breadth, or the percent of stocks in the index that have outperformed the index, may be more responsive, and therefore a better measure of market participation. Tests on MSCI country indexes suggest outperformance breadth is a better predictor of forward returns and downside risk than moving average breadth. Join NDR to discuss how you can use outperformance breadth to make informed investment decisions.

Disclosure: Ned Davis Research

The data and analysis provided by Ned Davis Research, Inc. (“NDR”) do not address suitability for any particular investor; are provided “as is”; and are based on data believed to be reliable, but not guaranteed. NDR DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. Performance measures do not reflect tax consequences, execution, commissions, and other trading costs, and investors should consult their tax advisors before making investment decisions. Past performance does not guarantee future results. NDR believes no individual graph, chart, formula, model, or other device should be used as the sole basis for investment decisions. Using such devices presents many difficulties and their effectiveness can vary over time because prior patterns may not repeat themselves and their use by other market participants can impact the market in a way that changes the effectiveness of such devices. NDR suggests using a weight of the evidence approach.

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Ned Davis Research and is being posted with its permission. The views expressed in this material are solely those of the author and/or Ned Davis Research and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

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