Retesting market-breadth when market structure changes

Measure supply and demand, not a price story

Technical work is framed first as an objective measurement of the supply-and-demand factors that move the equity tape, not as a narrative about price alone.

Market-breadth is a reading of how widely buying or selling is participating across the tape. In this workflow it is a checkable stand-in for supply and demand rather than a price forecast.

Cycle location from separate reading families

Cycle location is assembled from separate families of readings: investor psychology, momentum or rate of change, willingness to take risk, and the monetary or liquidity backdrop.

Willingness to take risk is the speculative-confidence question. Extremes appear when risk is ignored near cycle highs and when only risk is considered near cycle lows.

News can make the readings misleading

News episodes that produce widespread emotional trading can make those readings misleading. In 1987 the tape looked vulnerable without showing an impending collapse. In January 1991 the tape looked constructive without showing the size of the subsequent rise.

Structural-change on the printed tape

After listed call options in 1973 and unbundled commissions in 1975, dealer-style institutional dealing and derivative use changed how buying and selling printed. Confidence in older participation measures fell.

That lasting shift in how orders, derivatives, or dealer inventory print is the structural-change that can break the meaning of an older breadth or volume condition.

Speculative-confidence and the most-active-list

As smaller participants shifted from odd-lot stock trades into round-lot options, option activity became a clearer proxy for speculative-confidence than the older odd-lot tape.

Once hedging, arbitrage, merger-related volume, and one-day dividend-capture trades dominated the most-active-list, high volume no longer reliably distinguished speculative leadership from higher-quality leadership.

What the construction review kept

A review that began with 600 series and expanded to 800 constructions found that some measures correlated only on short and intermediate horizons. Dollar-momentum was kept as a shorter-horizon equity input rather than as a long-horizon composite member.

Dollar-momentum is the rate of change in the currency, treated as a shorter-horizon input because it affects cross-border equity flows and relative rate or inflation backdrops.

Cross-border equity flows were described as largely trend-following and emotion-driven, more likely to extend an existing move than to initiate buying at lows or selling at highs.

Name selection after the market and group tape

Name selection starts after the market and group tape. Unusual relative-strength comes first, then a check on whether earnings momentum is turning or has a reason to turn.

Relative-strength is a comparison of one name or group against the broader tape, used to spot unusually strong or weak participation before any fundamental check.

Individual names were observed to lose upside tape momentum before earnings momentum rolls over. The working rule is to stay with an emerging trend until that trend's own upward momentum fades.