We are starting a new section on the MasterDATA.com website about breadth indicators.  One indicator at a time will be added and discussed starting with the Advance Decline Line (AD Line).  On a regular basis, many additional breadth indicators will be presented.  Here is the URL:

http://www.masterdata.com/Indicators/Advance-Decline-Line.htm

My hope is to not only introduce many well establish, market tools, but also to start a growing conversation.  The more breadth analysis is talked about, the wider the usage and the more this approach will expand.  Towards this end, if you want to comment on the new section or using breadth data in general, your input is always greatly appreciated.  I hope you will share your input by commenting below (Click on “Comments”).

Thank you.

As of February 2, 2010, 6 ETFs have been added to our lists as follows:

Most Recently Added Exchange Traded Funds (ETFs):
► Direxion Daily China Bull 3X Shrs (CZM) Non-US Equity ETF
► Direxion Daily Latin America 3x Bull Shrs (LBJ) Non-US Equity ETF
► Direxion Daily China Bear 3x Shrs (CZI) Non-US Equity ETF
► Direxion Daily Latin America 3x Bear Shrs (LHB) Non-US Equity ETF
► ProShares Ultra 20+ Year Treasury (UBT) Fixed Income ETF
► ProShares Ultra 7-10 Year Treasury (UST) Fixed Income ETF

For more information or to download the complete list, click here.

Charts, reports and data are delayed today due to overnight technical issues.   Everything should be restored and current by approximately 7:30 pm est. 

Update at 7:30 pm est:  Daily data period charts, reports and datafiles are now current.  The longer data periods will follow shortly.

Update at 11:30 pm est:  All data period charts, reports and datafiles are now current. Thank you for your patience.

The quarterly compilation list revision is now complete.  Every quarter, ETFs that fall below the top 111 as measured by trade volume are deleted from the compilation list.  Historical breadth charts, reports and datafiles are generated on the “new” top 111. 

This quarter’s revision also makes available 70 additional ETFs for a total of 181 of the top trade volume US equity ETFs.  With the introduction of two new Dow indexes, there are now 33 covered indexes, a total of 214 indexes and ETFs in our compilation list.

To view the complete current compilation list, go to:

http://www.masterdata.com/Content/IndexesETFs.htm

Here are the additions to the top 111:

• Dow Jones U.S. Bank Index ($DJUSBK)
• Dow Jones U.S. Consumer Services Index ($DJUSCY)
• iShares Dow Jones U.S. Health Care Providers Index Fund (IHF)
• iShares Dow Jones U.S. Regional Banks Index Fund (IAT)
• iShares Dow Jones U.S. Utilities Index Fund (IDU)
• iShares Goldman Sachs Software Index Fund (IGV)
• iShares Russell 3000 Growth (IWZ)
• PowerShares Intl Dividend Achievers (PID)
• ProShares Short Financials (SEF)
• SPDR S&P Biotech ETF (XBI)

Here are the ETFs that have fallen out of the top 111:

• iShares Goldman Sachs Network Index Fund (IGN)
• PowerShares Dynamic Biotech &Genome (PBE)
• PowerShares Dynamic LargeCap Growth (PWB)
• PowerShares Dynamic Media (PBS)
• PowerShares Dynamic Retail (PMR) *
• Rydex 2x S&P 500 ETF (RSU)
• Rydex S&P SmallCap 600 Pure Value ETF (RZV)
• SPDR KBW Capital Markets ETF (KCE)

As previously mentioned two indexes have also been added.  One was in response to a subscriber request and the other is an index used as the benchmark for the newly added ProShares UltraShort Consumer Services (SCC).

Because the 70 new ETFs are being added this quarter, the deletions listed above actually wind up somewhere in the new list of 70.  The exception is PMR which dropped out of the top 181 altogether.

The expanded ETF list introduces a wide variety of sectors and industry groups as well as two large, but previously unrepresented, sponsors, First Trust and WisdomTree.

(The MasterDATA Composite Plug-in allows MetaStock users to download our historical breath datafiles and use them directly in MetaStock with no import or conversion.)

Version 4.0 of the MasterDATA Composite Plug-in is now released and ready for download.  This new release fully accommodates both Vista and Windows 7.  As Microsoft continues to tighten security in  its operating systems, what worked well before is not necessarily compatible with what works today.  In this case, revisions in the way that the  “C:\Program Files” directory is handled, changed everything.  But, as they say, “as one window closes, another one opens” and Microsoft opened a new, exceptionally convenient window, the “C:\ProgramData” directory.   You can’t easily write to the former anymore, but you can write, at will, to the new one.  Better yet, that is exactly what Microsoft has in mind.

Anything is easy if you know how.  Same goes here.  I can’t tell you how much wheel spinning I did trying to track down why we were incurring a growing number of installation issues.  It was fairly apparent that Vista and Windows 7 had something to do with it, but what?  Some users with these operating systems installed without issue.  For the ones who didn’t, however, it was very frustrating.  My apologies. 

The solution turned out to be a fairly easy one and, frankly, one that makes everything simpler.  Simpler is always better.  I just needed to write the necessary configuration files to the location Vista and Windows 7 now provided for the purpose.  One that never existed before.  And one that, amazingly, in all the forums I searched, no one talked about. 

So its fixed.  Its as easy an installation as I have ever written.  And once installed, it is rock solid in operation.

Existing users really don’t really need to upgrade.  Frankly, before now, it was getting to the point I think I subconsciously discouraged existing subscribers from upgrading at all.  No longer.  Although you do not need to upgrade, I encourage everyone to upgrade at their earliest convenience.  You will be very pleased.  If you are not already a Vista and Windows 7 user, you probably will be eventually.  By the way, for what its worth, Windows 7 gets my vote.

The move to our new dedicated web servers is complete.  Although there will always be further tweaking, that has always been the case.  Importantly, the list of benefits is long.

Server speed is almost twice as fast.  That translates into getting our datafiles on the website in less than ten minutes after the hour versus 15 minutes previously.  Our breadth reports and charts are on the website in less than 15 minutes versus up to 25 to 30 minutes before.

The internet connection speed of the new web servers dwarfs our previous connection speed.  Of course, your speed will still be dictated by your local connection speed, but this speed on our end means no slow down due to higher traffic during the course of the day.  We now have virtually unlimited bandwidth with 100% network uptime.

Just as important, we now have a full time on-site staff of network professionals monitoring our web servers 24/7.  If there is a hardware failure it will be fixed within three hours.  They promise, no network outages, period.  Thankfully, in seven years of running the same servers here locally, I never had one hardware failure, but that was sheer luck.  I knew if it ever happened, I would most likely be down for a day or more.  Now they watch things while I sleep.

The list of benefits is much longer that this, but it all boils down to reliability and speed.

Charts, reports and datafiles are now current.  This was not so much a technical failure as a learning experience on the new web servers.  Everything is restored and rebuilt and better than ever.

We apologize for any inconvenience.

Charts, reports and data are delayed today due to technical issues overnight.  Thank you for your patience.

Data and website status will now be posted in the MasterDATA forum.  Additionally, you can subscribe to the RSS datafeed to be notified when charts, reports and/or data is delayed or unavailable.  Click here to sign up for the feed.

Although I typically design my own breadth indicators, in my opinion, you can’t deny this A/D Line for the S&P 500 Index on 10-26-2009.

The A/D Line is calculated by starting at 0 (zero) and accumulating the difference between advancing issues (A) minus declining issues (D) within the index or ETF, in this case the S&P 500 Index.  A very simple calculation, but one that is very seasoned and highly regarded.

One way it is used is divergence.  Divergence is one of my least favorite measures of what a composite like the S&P 500 Index might be doing, but if you followed it in the example above you would be a very happy camper.  The idea is that when the index makes a new high, the A/D Line also must be making new highs.  If not, then that is a sign the price move might be breaking down.  The chart above shows no divergence since July of 2009.  So if you were long the index, this indicator says you should still be long and only now as the A/D Line may be rounding off should you be alert to possible declines.  Divergence (or lack of it in this case) says the up move is still place.

Since this chart only shows a lack of divergence, here is an example from Steve Achelis of MetaStock showing divergence: 

“The DJIA was making new highs during the 12 months leading up to the 1987 crash. During this same period, the A/D Line was failing to reach new highs. This type of divergence, where the generals lead and the troops refuse to follow, usually results in the generals retreating in defeat as happened in 1987.”

“A military analogy is often used when discussing the relationship between the A/D Line and the DJIA. The analogy is that trouble looms when the generals lead (e.g., the DJIA is making new highs) and the troops refuse to follow (e.g., the A/D Line fails to make new highs).”