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The Hughes Breadth Index is also known as the The Hughes Breadth-Momentum Oscillator.
It measures the ratio between the difference of advancing and declining issues in an exchange, to the total number of issues. The theory behind the index is that increases in stock prices are preceded by strengthening internals of the market, and the reverse is true for decreases in stock prices.
The calculation is: H = (A-D)/(A+D+U)
Where
H = today's 1-day ratio of net advances to total issues trades
A = number of advancing issues
D = number of declining issues
U = number of unchanged issues
(A+D+U) is the total number of issues traded each day. Typically the indicator is calculated on the NYSE data, though similarly it can be calculated on other markets such as Nasdaq.
In this implementation the index is 'normalized' so as to get positive numbers, between 0 and 100 percent.
This index based on daily data is quite erratic, and is typically smoothed by simple or exponential moving average in order to facilitate analysis
This object uses NYSE data provided by the download object Advance-Decline-Unchanged issues for NYSE, AMEX and NASDAQ, which downloads data from www.unicorn.us.com . This data source gather data from various publicly-available sources and report the median values found. For further explanation on why the numbers provided by different sources may differ, see http://unicorn.us.com/advdec/about.php . When developing strategies based on breadth data it is advisable to use a consistent data source for backtest and trading. Unicorn's data for NYSE goes back to March 1965, allowing for long backtests.
The symbol for the Hughes Breadth Index on NYSE expressed in percentages: "_P_HUGHES_BREADTH_NYSE"
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
