My Developed Markets Advance-Decline line, which consists of 22 developed markets, just closed at an all-time high.
Here’s the chart:
(right-click and open image in new tab to zoom in)
Let's break down what it shows:
The black line represents the Developed Markets Advance-Decline line, which includes the following countries' ETFs: Canada, USA, Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, UK, Australia, Hong Kong, Japan, New Zealand, and Singapore.
The Takeaway: I like using this AD Line as it is a valuable indicator for assessing overall market strength. It measures the number of developed markets participating or not, providing us with insights into the health of the market move. So, when more markets are advancing than declining, the AD Line rises; in contrast, it falls when there are more declining markets than advancing ones.
Currently, this AD line is at its highest level ever, which means that the strong market internals are not limited to just the US.
This widespread confirmation from global market internals is what Bulls want to see…. More markets around the world advancing than declining.
It's pretty difficult to enter a bear market or experience a significant correction when this trend occurs. Therefore, as long as these strong internals continue globally, it is unlikely that markets will reach a peak just yet.
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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