Great breadth of the market is a sign that the movement under way will shortly culminate
....Artificial support turned the market upward and
several rallying days followed...Note how the market narrowed as
prices recovered. This shows a decreasing demand at higher levels.
People with money were willing to buy at higher levels, but they would
not bid prices up.
Some market students consider the breadth of the market a more
reliable indicator than its volume....the volume may be heavy even in
a narrow market, because the totals are padded by the operations of
large interests and floor traders who generally work in the leading
A broad market generally means wide participation in the dealings by
all sorts of people. It is therefore more genuine than a market of
large volume. Each additional stock recorded in the day's dealings
will interest its own circle of followers all over the country and
cause many of them to buy or sell.
The practical side of this question readily suggests itself to those
who are endeavoring to master the market's intricacies. Study of
breadth and narrowness in not widely different from a study of
volumes. Each stock dealt in forms a unit of participation;
collectively they are a means of measuring the extent of outside
interest. Put in graphic form the eye readily grasps the relative
breadth at certain stages. Each individual must decide for himself
whether he can extract sufficient value from these indications to
warrant his permanent adoption of the idea.
Richard d Wyckoff - Fourteen Methods of Operating in the Stock Market