Market Breadth or Beta by Dennis D. Peterson
ARTICLE SYNOPSIS ...Market Breadth
Breadth and beta both start with "b," but what else do they have
in common? Maybe a way to help make trading decisions.
by Dennis D. Peterson
Market breadth is a measure of market
momentum. When momentum
is positive and increasing, the market
is bullish, and when momentum
is negative and decreasing,
the market is bearish. Some stocks are highly correlated with market momentum; that is, when
the market is bullish, the stocks are rising, and when it is
bearish, the stocks are declining. The correlation that a stock
has with a market is known as its beta value. Thus, kn...