Problem set Chapter 9: 1. Consider the following market statistics: Day Advances

Question

Problem set Chapter 9: 1. Consider the following market statistics: Day Advances 870 760960 840 Declines 880990 910 Volume advancing (m) 580 620 480 510 Volume declining (m) 670 580 720 520 Yield on top-rated corporate bonds 6.8 % 6.7% 6.7% 6.6% Yield on intermediate-grade corporate bonds 7.4% 4 7.4% 77.5% 7.6% Compute the following ratios/indices for the four days, and state whether these indicate a bullish or bearish signal a) The tuin ratios. b) The confidence index. c) The market breadth. d) The cumulative breadth. e) Cumulative breadth for the 4 days is , which is

Explanation / Answer

1 2 3 4 Adavances 870 760 960 840 Declines 880 990 790 910 Volume Advancing 580 620 480 510 Volume Declining 670 580 720 520 Yeild on top rates corporate bonds 6.8 6.7 6.7 6.6 Yeild on Intermediate rated corporated bonds 7.4 7.4 7.5 7.6 A) The Trin Ratios      a) Advances/Declines 0.988636 0.767677 1.21519 0.923077      b) Advances Volumes/Declines volumes 0.865672 1.068966 0.666667 0.980769          Trin ratio (a/b) 1.142045 0.718149 1.822785 0.941176 Bearish Bullish Bearish Bullish B) Confidence Index 0.918919 0.905405 0.893333 0.868421 C) Market Breadth      (Advances/Declines) 0.988636 0.767677 1.21519 0.923077 Bearish Bearish Bullish Bearish D) Cumulative Breadth      ( Advances- Declines) + Yesterday's A/D line -10 -240 -70 -140

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