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 continue 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 stock 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.
Some Definitions:
Composite:
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 composites.
For a list of
MasterDATA's followed indexes and ETFs
(composites),
click here.
Exchange Traded Funds:
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.
For a downloadable
list of all current Exchange Traded
Funds,
click here.
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!
Click here for details
"This book should be called
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form of market breadth known to man. A must for any serious
student of this important and overlooked subject."
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:
The above links lead
to our Subscriber Section. Subscribers
will need to log in for current charts and
reports (updated hourly throughout the trade
session). Non-subscribers can sign
up for a free subscription, by
clicking here.
For a list of
all stock issues included in MasterDATA's
Compilation List of followed indexes
and ETFs,
click here.
Component
/ Constituent Data:
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.
composite breadth Data:
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".
For the list of composite
data currently compiled by MasterDATA,
click here.
composite breadth Indicators:
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.
For a list of well known
composite indicators,
click here.
New composite breadth Indicators:
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.
For a list of well known
technical indicators on individual issues,
click here.
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:
Disclaimer: This material is for your private
information. We are not soliciting any action based upon
it. Opinions expressed are present opinions only. The
material is based upon information considered reliable,
but we do not represent that is accurate or complete,
and it should not be relied upon as such. We, or persons
involved in the preparation or issuance of this material
may, from time to time, have long or short positions in,
and buy or sell the securities or options of companies
mentioned herein.
