Introduction to Composite Breadth Data
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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 continues
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
equity 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.
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Composite: |
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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 approximately 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
equity composites.
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For a list of
MasterDATA's followed
indexes and ETFs
(composites),
click here. |
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Exchange Traded Funds: |
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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.
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For a downloadable list
of all current Exchange
Traded Funds,
click here.
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For more
from Greg Morris,
click here. |
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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!
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| "This
book should be called the Encyclopedia of
Market Breadth because it includes every
form of market breadth known to man. A must
for any serious student of this important
and overlooked subject." |
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--Martin
Pring, Author,
Technical Analysis Explained
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Component
/ Constituent:
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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:
Intel Is a Component of the
Following Composites
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Current charts and
reports are updated
hourly throughout the
trade session).
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For a list of all stock
issues included in
MasterDATA's Compilation
List of followed indexes
and ETFs,
click here.
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Component / Constituent Data |
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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.
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Composite breadth Data: |
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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".
MaterDATA
methodology.
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For the
list of composite data currently
compiled by MasterDATA,
click
here.
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Composite breadth Indicators: |
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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.
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For a list
of well known composite
indicators,
click
here.
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New composite breadth Indicators: |
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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.
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For a list
of well known technical
indicators on individual issues,
click
here.
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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:
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