Market Breadth Analysis: NYSE and Nasdaq Indicators
User: https://stockcharts.com/c-sc/sc?s=%24NYMO&p=D&yr=1&mn=6&dy=0&i=t0197117899c&r=1724067215619
Assistant: This image shows a chart of the NYSE McClellan Oscillator (Ratio Adjusted) over approximately the past year and a half. The chart is divided into two parts:
The top section displays the price movement of the indicator, which oscillates between positive and negative values, typically ranging from about -100 to +300.
The bottom section shows the daily values of the oscillator itself, represented by a red line graph.
Key observations:
The oscillator frequently moves between overbought (high positive values) and oversold (negative values) conditions.
There are several notable spikes and dips throughout the period, indicating periods of extreme market breadth.
The most recent data point (August 16, 2024) shows the oscillator at a value of 42.54, which is in positive territory but not at an extreme level.
The chart demonstrates the cyclical nature of market breadth, with regular fluctuations between positive and negative readings.
There appears to be no clear long-term trend, as the oscillator moves up and down frequently, which is typical for this type of indicator.
The NYSE McClellan Oscillator is a market breadth indicator that helps traders and analysts gauge the overall health of the market by measuring advancing and declining stocks on the New York Stock Exchange. Extreme positive values can indicate overbought conditions, while extreme negative values may suggest oversold conditions. This chart would be useful for technical analysts and traders looking to understand market sentiment and potential turning points in the broader market.
User: https://stockcharts.com/c-sc/sc?s=%24NASI&p=D&yr=1&mn=0&dy=0&i=t7441205199c&r=1724067401077
Assistant: This image shows a chart of the Nasdaq McClellan Summation Index (Ratio Adjusted), which is a long-term market breadth indicator for the Nasdaq stock market. The chart covers approximately one year of data, from September 2023 to August 2024. Key observations:
The indicator fluctuates between positive and negative values, with a range roughly from -1000 to +500.
There’s a clear cyclical pattern, with the index moving through bullish (positive) and bearish (negative) phases.
The most recent data point (August 16, 2024) shows the index at -194.93, indicating a slightly bearish sentiment but not at an extreme level.
There are several notable trends and reversals:
A significant downtrend from September to November 2023 A sharp uptrend from November 2023 to January 2024 A gradual decline from January to April 2024 Two cycles of recovery and decline from April to August 2024
The index appears to be more often in negative territory than positive, which might suggest a generally bearish bias over the period shown.
The steepest ascent occurred in late 2023, while the steepest descent was in early 2024.
This indicator is useful for traders and analysts to gauge the overall market sentiment and potential trend changes in the Nasdaq. Positive values generally indicate bullish market breadth, while negative values suggest bearish market breadth. The current reading of -194.93 implies a slightly bearish sentiment in the Nasdaq market, but not at an extreme level.
User: https://stockcharts.com/c-sc/sc?s=%24NYSI&p=D&yr=1&mn=0&dy=0&i=t9426267743c&r=1724067467950
Assistant: This chart displays the NYSE McClellan Summation Index (Ratio Adjusted) over approximately a one-year period, from September 2023 to August 2024. The NYSE McClellan Summation Index is a long-term market breadth indicator that helps assess the overall health and direction of the New York Stock Exchange. Key observations:
The index ranges from about -800 to +1100 over the period shown.
The current value (as of August 16, 2024) is 559.71, which indicates a positive market breadth.
There’s a clear cyclical pattern with several notable trends:
A significant downtrend from September to November 2023 A sharp uptrend from November 2023 to January 2024 A period of consolidation at higher levels from January to March 2024 A steep decline in April 2024 Two cycles of recovery and decline from April to August 2024
The steepest ascent occurred in late 2023, reaching a peak in early 2024.
The index has spent more time in positive territory than negative, suggesting an overall bullish bias for the period shown.
The most recent trend shows a recovery from a low point in June 2024, with the current value (559.71) indicating moderately positive market breadth.
This indicator is valuable for traders and analysts as it provides insight into the overall market sentiment and potential trend changes in the NYSE. Positive values generally suggest bullish market breadth, while negative values indicate bearish market breadth. The current reading of 559.71 implies a positive sentiment in the NYSE market, though not at extreme levels. The chart demonstrates that the NYSE has experienced both bullish and bearish periods over the past year, with the current state leaning towards bullish sentiment.
User: What is the relationship between NYSI and NASI
Assistant: The NYSI (NYSE McClellan Summation Index) and NASI (Nasdaq McClellan Summation Index) are related market breadth indicators that provide insights into the overall health and direction of their respective markets - the New York Stock Exchange and the Nasdaq. Key relationships between NYSI and NASI:
Similar purpose: Both indicators are used to measure market breadth and momentum over a longer time frame, typically weeks to months.
Calculation method: Both are derived from the McClellan Oscillator for their respective markets, which is a measure of market breadth based on advancing and declining issues.
Interpretation: For both indicators, positive values suggest bullish market breadth, while negative values indicate bearish market breadth.
Different markets: NYSI reflects the broader market (NYSE), while NASI focuses on the tech-heavy Nasdaq.
Divergence in trends: Comparing the charts, we can see that while they often move in similar directions, there are periods of divergence:
The NYSI shows generally higher values and spends more time in positive territory. The NASI appears to have lower peaks and deeper troughs, spending more time in negative territory.
Current readings: As of August 16, 2024, the NYSI is at 559.71 (positive), while the NASI is at -194.93 (negative). This divergence suggests that the broader market (NYSE) is showing more positive breadth than the tech-focused Nasdaq.
Relative volatility: The NASI appears to be more volatile, with sharper moves between extremes, while the NYSI shows somewhat smoother transitions.
Leading/lagging relationship: Sometimes one index may lead the other in showing a change in trend, which can be valuable for predicting shifts in the other market.
These differences can provide insights into sector rotation, relative strength between tech and non-tech stocks, and overall market sentiment. Traders and analysts often use both indicators in conjunction to get a more comprehensive view of market breadth across different segments of the stock market.