A market breadth indicator measuring the percentage of U.S. stocks above or below their VWAP, providing insights into overall market momentum and potential trading directions.
Explore complementary indicator rolesHow it works
The indicator calculates the percentage of U.S. stocks trading above or below their Volume Weighted Average Price (VWAP) for each candle. It creates a dynamic line that tracks market-wide price positioning relative to the VWAP benchmark. The line fluctuates around a 50% midpoint, with additional horizontal lines at 40% (oversold) and 60% (overbought) to provide visual reference points.
When the line crosses 50%, it plots green or red triangles indicating a shift in market momentum. Green triangles suggest bullish sentiment when the line rises or stays above 50%, while red triangles indicate bearish sentiment when the line falls or remains below 50%.
Why it may be useful
This indicator provides traders with a comprehensive view of market-wide price dynamics by showing how individual stocks are performing relative to their VWAP. It offers insights into broader market sentiment and potential trend reversals that might not be apparent when looking at individual stock charts. By revealing the collective positioning of stocks, traders can gauge overall market strength and make more informed trading decisions.
The signal helps traders identify potential entry and exit points by highlighting moments when market momentum shifts. When the line crosses key levels like 40% or 60%, it signals potential changes in market sentiment, allowing traders to adjust their strategies accordingly and potentially capitalize on emerging trends.
When to explore it
This indicator is most effective when trading major indices like SPX, SPY, QQQ, or IWM, and their corresponding futures contracts. It works best during active market hours when price movements are most dynamic and representative of overall market conditions. Traders should use it in conjunction with other technical analysis tools and personal price action strategies to confirm signals.
The indicator is particularly useful during periods of market uncertainty, helping traders identify shifts in momentum and potential trend reversals. It provides a broader perspective on market health, making it valuable for traders seeking to understand the underlying strength or weakness of the current market environment.
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What we’ve verified
Access, alerts and repainting behaviour have not been independently verified for this indicator. Check the creator’s current publication and settings.
General descriptions and classifications are recovered research. Verified details above identify the specific checks we have completed. Check the creator’s current publication for later changes.
