What The Advance/Decline Line Tells You Now

The cumulative advance/decline line (not to be confused with the “other” advance/decline line) has thrown a wrench into the bearish equity scenario as it exceeded the old April high and made a new high last week. This indicator is watched far and wide by technicians as a reliable (yet, not perfect) indicator. In Aug 2014 it reached to a new high only to see the Dow drop 7.00%.  In July 2011 it hit a new high and was followed by a decline of 19.00% in the Dow. Nevertheless, bears need to stay on their toes.

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