Wednesday, March 4, 2009

Breadth Indicators With Confirming Extremes

Yesterday I noted my Capitulative Breadth Indicator (CBI) spiked above 10 up to 12. On Tuesday the number reached even higher to 18. Eighteen is an extreme reading that has only been reached during 5 other periods since 1995.

Before I show those dates I want to mention another breadth indicator I look at which also measures oversold breadth. Worden Bros. T2114 and T2116 measure the % of stocks trading 1 and 2 standard deviations below their 40-day moving average. Both are in extreme territory at the current time. T2114 (1 standard deviation stretch) is reading almost 87% currently. Data is available back to 1986. Since then there have only been 6 other periods where similar levels were reached.

Below is a table comparing the CBI>=18 to a Worden Bros. T2114 > 85:

Both indicators are now at similar extremes only reached during some sharp selloffs that resulted in sharp rebounds.


Jeff Pietsch CFA Esq said...

Thanks Rob.

Jim said...

Thanks Rob.
Did the CBI change for 3/4? It's still posted as 18 for 3/3.

Shawn said...

Rob, Really appreciate your work for guiding us the newbies through this volatile times.

Thanks Again

Anonymous said...


this set up seems a bit shaky at the moment but of course you never know how they will play out.

any other set ups in your vast array that could be used as confirmation?

love the blog--thanks for the great work.

MasterDATA said...

Hi Rob,

I assume when you refer to breadth indicators you are using the NYSE Composite? Would it make sense to apply this same work to many other equity indexes and ETFs? I own the web sites which for the last six years has compiled and provided to subscribers this historical breadth data on many indexes and ETFs. I would appreciate all feedback.

Thank you.