The Advance Decline (AD) Index is an indicator put together by the New York Stock Exchange that is calculated by subtracting the number of stocks that are declining for the day from the number of stocks that are advancing for the day.
Since it’s cumulative, each day’s calculation is added or subtracted from the previous day’s indicator. If the AD Index is rising, it could mean the market is strengthening, and if the AD index is falling, it could signal the market may be tanking.
As an example, let’s say the AD Index on the S&P 500 is currently at 2000. At the end of the trading day, 400 stocks were up and 100 were down, so you would subtract the two and add it to the AD Index value, increasing the S&P 500 to 2300. This suggests the market is gaining momentum.
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Finance: What is the Dow Jones Industria...2710 Views
finance a la shmoop- what is the Dow Jones Industrial Average? well it's just
an index. it's a basket of 30 industrial stocks hence the catchy industrial word [list of the 30 stocks involved in the Dow]
in there and it was started in 1896 by Charles Dow and Edward Jones sort of the
Coke and Pepsi of stock averages in the day .worth noting is the fact that while
the Dow average is quoted often in the press it's not something that real Wall
Street traders really rely on that much as a market place holder anymore. why?
well because the Dow comprises only 30 stocks. it isn't really a broad market [Dow Jones in the trash]
representation, and you know the way the S&P 500 is the 500 is bigger than 30. Big
Brother has way more stocks and is thus way more liquid than the relatively
blippi set of 30 stocks that the Dow offers. over time the Dow has changed as
companies were bought and/or died and or just withered and became no longer
relevant. i.e. newspaper industry. which means that this thing has gone through
more faces than Kanye West .yeah. [Kanye West faces pictured]
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