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Trend Trading For Dummies by Barry Burns

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Chapter 7

Understanding Broad-Based Market Indicators

In This Chapter

arrow Keeping your eye on volume patterns and the advance/decline line

arrow Putting the price and volume indicator together in one

arrow Taking a consensus of sectors and industries

arrow Getting sentimental about the market

arrow Influencing the future

In Chapter 6, you explore indicators that measure the trend on any one given market (stock, commodity, or currency). In this chapter, you look at broad market indicators, which measure the energy of a large group of stocks combined into an index. (An index is calculated from the prices of a select group of stocks, such as those in the S&P 500, the NASDAQ, or the DOW.)

Just as you apply indicators to individual markets, you can also apply indicators to indexes and then compare the market you’re trading to the broader market it’s a part of.

tip.eps The benefit of comparing a stock to its broader index ...

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