Advance / Decline (A/D line)

An “internal” measure of market strength. Typically the major averages are referred to as the “generals,” while the A/D line is referred to as the “troops.” If the troops have departed a bull market, and only the generals are leading ahead, we can look for the generals to make a turn lower (Another example of divergence.). Conversely, if the A/D line is hitting new highs along with the major averages, that’s typically a sign of internal strength.