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1990issue C041-3

Evaluating daily and weekly unsigned plurality breadth

Unsigned plurality records the size of the advance-decline gap without naming the leading side. A daily 25-session plurality-total then uses a threshold-watch and later turn-confirmation, while a five-week total needs lower bands because weekly-cancellation offsets opposite session gaps.

  • Plurality is the unsigned gap between advancing and declining issues, so the same numeric lead is recorded whether advances or declines dominate.
  • The daily plurality-total is a 25-session moving sum, and a threshold-watch becomes a directional hypothesis only after turn-confirmation.
  • Weekly-cancellation shrinks a five-week total relative to the daily total, so weekly bands sit lower and the author judged that series unhelpful at a short horizon.
  • The author concludes that the daily construction is the version to monitor and that the rule is intermittent rather than continuously in a signal state.
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Current trackMarket breadth120 readings

What unsigned plurality records

Plurality is the unsigned gap between the count of advancing issues and the count of declining issues in one session. The same numeric lead is recorded whether advances or declines dominate.

The daily plurality-total

One daily construction is a 25-session plurality-total of that unsigned gap. The total is refreshed as each new session arrives. It is a moving sum of session plurality readings, not an average of the same readings.

Threshold-watch and turn-confirmation

In that daily rule, a drop of the plurality-total below 6000 is only a sell threshold-watch. The sell hypothesis is taken after turn-confirmation, when the total turns back up.

A rise of the plurality-total above 12000 is only a buy threshold-watch. The buy hypothesis is taken after the total turns back down.

Exhaustion-top and panic-bottom

The stated rationale for the high-band sequence is an exhaustion-top: late-advance complacency or exhaustion with thin two-way activity rather than a crowded exit. The stated rationale for the low-band sequence is a panic-bottom: late-decline crowding as many participants attempt to leave at the same time.

Weekly-cancellation and the five-week total

A five-week moving total of weekly plurality needs lower numerical bands than the 25-session total because of weekly-cancellation. Opposite daily gaps cancel inside a week, so the weekly unsigned total shrinks relative to the daily total.

Weekly bands and horizon

On weekly data the author used mean plus-or-minus one standard deviation as a one-standard-deviation-band, placed one standard deviation above or below the mean of the weekly plurality total. The author judged the weekly series unhelpful at a short horizon, while still treating it as relevant to a one-year forecast window.

Five-week unsigned plurality total, 1984–1990

Merrill’s weekly five-week moving total of unsigned NYSE plurality, read off Figure 1. Mean and ±1 standard-deviation bands are the weekly substitutes for Shaw’s 6,000 / 12,000 daily marks. The late-1987 spike is the crash panic; 1988–89 bearish band breaks were the signals Merrill called unhelpful.
Merrill’s weekly five-week moving total of unsigned NYSE plurality, read off Figure 1. Mean and ±1 standard-deviation bands are the weekly substitutes for Shaw’s 6,000 / 12,000 daily marks. The late-1987 spike is the crash panic; 1988–89 bearish band breaks were the signals Merrill called unhelpful.NYSE unsigned plurality (five-week moving total) · weekly · 1984-01-01T00:00:00.000Z to 1990-03-31T00:00:00.000Z

Y values are thousands of issues on the printed 2–12 scale. Weekly cancellation makes this five-week total sit well below a 25-session daily total; points are approximate reads from the raster, not a source table. The printed Figure 1 caption in the source names an unrelated resistance index and was not used.

How the weekly plot was read

The author's reading of the weekly plot found mixed 1984 signals, an early-1985 bullish call followed by later bearish calls judged unhelpful, and three 1986 bullish calls.

The same reading recorded an October bearish call a year before the crash, then a February bullish call, three strong bullish calls around the crash panic, and five 1988-1989 bearish penetrations judged not very useful.

Which construction the author kept

The author concludes that the daily construction is the version to monitor. The rule is intermittent rather than continuously in a signal state.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
10 of 71 in the Market breadth track
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