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Introduction to Composite Breadth Data
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Stock composites
are nothing new. Stock market
indexes are composites. More recently,
a new type of composite, the Exchange
Traded Fund (ETF), began trading and
continues to grow rapidly in both importance
and trade volume. ETFs offer the
ability to trade industry groups and
sectors as well as mirroring indexes
(i.e. the SPY ETF is virtually equivalent
to trading the S&P 500 Index).
The following provides an overview of
equity composites and the concepts and
methods of analyzing the individual
issues (components or constituents)
that make up the composite.
Such composite breadth data provides
better understanding of and, perhaps,
a better chance of anticipating price
movements in the composite itself.
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Composite: |
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Any grouping
of a specified list of securities.
Most indexes and Exchange Traded Funds
(ETFs) are composites. For example,
the S&P 500 Index is a composite of
500 stocks traded on various U.S. exchanges.
Another example is the Semiconductor
HOLDRS (SMH), an ETF, made up of 20
stocks. Generally, composites
are groupings of stocks with some common
thread such as an industry group or
sector or constructed to reflect a particular
market segment. Certain ETFs duplicate
the components of an index (for example,
the ETF, SPY, has the same component
list as S&P 500 Index - $SPX).
Some indexes
and ETFs have no components, such as
the 30 Year Treasury Yield Index ($TYX)
or the StreetTracks Gold Shares (GLD).
Currently, the MasterDATA web site will
not focus on indexes or ETFs without
components, but specifically with indexes
and ETFs that are true equity composites.
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For
a list of MasterDATA's followed
indexes and ETFs (composites),
click
here. |
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Exchange
Traded Funds: |
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Exchange
Traded Funds (ETFs) are index funds
or trusts that are listed on an exchange
and can be traded intraday. Investors
can buy or sell shares in the collective
performance of an entire stock or bond
portfolio as a single security.
Exchange traded funds add the flexibility,
ease and liquidity of stock trading
to the benefits of traditional index
fund investing.
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For
a downloadable list of all
current Exchange Traded
Funds,
click
here.
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For more
from Greg Morris,
click here. |
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Expert guidance
to help you use market breadth indicators in
your investments.
Capsule descriptions of more than 80 leading
breadth indicators--what they are, what they
mean, and when and how to use each!
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| "This book should
be called the Encyclopedia of Market Breadth
because it includes every form of market breadth
known to man. A must for any serious student
of this important and overlooked subject." |
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--Martin
Pring, Author,
Technical Analysis Explained
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Component / Constituent:
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The individual
issues making up a composite are components.
For example, Intel (INTC) is a component of
the Dow Jones Industrial Average. INTC
is also a component of the Semiconductor HOLDRS
(SMH). A particular issue may be a component
of numerous indexes and ETFs.
On the MasterDATA
web site, links to brief statistical reports
are provided on each component within the various
index and ETF reports. This report also
lists each composite followed by MasterDATA
to which the component stock belongs with a
link to the composite charts and report.
For instance at the bottom of the Intel report,
is a list of the composites that it is a component
of as follows:
Intel Is a Component of the
Following Composites
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Current
charts and reports are
updated hourly throughout
the trade session).
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For
a list of all stock issues
included in MasterDATA's
Compilation List of followed
indexes and ETFs,
click
here.
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Component / Constituent
Data |
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Statistical information
compiled on the individual issues within an
index or ETF. Examples of component data
include trade volume, net change, whether or
not the issue is in an uptrend or above its
200 day moving average, etc.
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Composite breadth Data: |
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An accumulation
of all similar component data calculated on
each component issue within an index or ETF.
For example, if 230 issues within the S&P 500
Index increased in price for the day, the advancing
issues statistic for the day is 230. When
the volume for each of these advancing components
is totaled, the composite statistic is "advancing
volume".
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For the list
of composite data currently compiled
by MasterDATA,
click here.
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Composite breadth Indicators: |
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Built upon composite
data, composite indicators are tools for analyzing
the price movement of composites. Well
known composite indicators include the McClellan
indicators, Arms Index, Advance-Decline Line
and many more. Traditionally, such composite
data has only been available reflecting the
major exchanges such as the NYSE, AMEX and NASDAQ.
These same highly regarded composite indicators
can now be applied to specific indexes and ETFs
using the historical datafiles available on
this web site.
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For a list
of well known composite indicators,
click here.
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New composite breadth Indicators: |
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Creating new composite data
and using it in new composite indicators is
subject only to imagination. Perhaps,
the easiest place to begin is with existing
well known technical analysis indicators generally
used to analyze individual securities.
One example could be the total number of components
within an index or ETF with a Relative Strength
Index (RSI) over 70. Variations might
be how many component RSI's were recently
above 70 and now are below it or, simply, the
number of components with rising RSI's.
The same concept can be applied with any other
technical analysis indicator on individual issues.
The development of composite
breadth data analysis is one of the ongoing
endeavors of MasterDATA in our quest to trade
more effectively. When we find a new composite
statistic of merit, it will be added to our
web site historical datafiles of composite data
as well as charts and reports.
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For a list
of well known technical indicators
on individual issues,
click here.
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MasterDATA's composite breadth
data and indicators can be viewed in up to date
daily reports and charts or downloaded for use
in your own charting software and calculations.
Click on one of the following links for additional
information:
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