How to find current market status
By studying the buying interest or selling pressure through the study of 8 market factors. Heat map gives most of the data.
Eight market conditions defining trends are
As summarised by Bill Duryea,a list of 8 conditions is as follows:
The Theory and Assumptions of Buying Interest & Selling Pressure
1.) Over varying periods of time, the price volume action of the market moves in trends, both up and down. The fundamental premise of technical analysis is that it is possible to identify the conditions that led to the continuation and turning point (reversals) of the trend.
2.) The relative strength or weakness of the Index is evaluated by the price volume action of its underlying components.
3.) The conditions that lead to a trend are referred to as Buying Interest and Selling Pressure. As these conditions relate to the price movement of the Index.
4.) The market condition is measured by the number of advancing issues versus the number of declining issues, and the volume trading with the advancing issues versus the volume trading with the declining issues.
5.) The price volume data generated by the market is the best available source of information upon which the investor (trader) can form an objective analysis of the market.
6,) Volume goes with the trend.
In an uptrend, volume increases as price advances and decreases as price declines.
In a downtrend, volume increases as price declines and decreases as price advances.
Reversal
Contrary volume behavior may signal an important reversal of the trend.
7.) Price movement occurs in two phases;
trending and consolidation.
8.) Trending and consolidation are expressions of support and resistance.
The rule of thumb is that when the price and volume rise together there is sufficient Buying Interest to indicate an uptrend.
Conversely, when price and volume decline together there is sufficient Selling Pressure to indicate a downtrend.
And those are the 8 Market Conditions behind trends.Now you know,if you are dealing with markets ignoring the major factors.Point No-4 is one of those mostly not considered.
where to see the advance-decline information?
One way is to see the heatmap http://www.buzzingstocks.com/in/heatmap.htm
Another way is see breadth charts in site www.icharts.in
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