$ADD Sector Weighted Advance/Decline Indicator

$ADD Sector Weighted Advance/Decline Indicator

Advanced market breadth analysis for ThinkorSwim

$2000 $1500 $1000 $750 $500 $ADD 1204.00 +64.00 5m Style Studies $ADD 5 D 5m D: 4/14/25, 12:25PM O: 1203 H: 1206 L: 1176 C: 1204 1204 Sector Strength H1: 11 M30: 5 M15: -5 M5: -5 High: 2.397 Low: -2.576 Current: 1.203 Range: 4.973 +2.397 Weighted_ADSPDLite (930, 6.8, 2.9, 8.6, 11.0, 2.8, 8.0, 4.2, 2.9, 14.2, 27.2, 11.5) -413.882 -237.931 XLK 27.2%: -2.1378 XLV 14.2%: -0.369 XLY 11.5%: -1.719 XLC 8.6%: +0.7676 XLF 11.0%: -0.2429 XLI 8.0%: -0.2995 XLP 6.8%: 0.9543 XLRE 2.9%: 1.0706 XLB 2.8%: -0.4174 XLU 2.9%: 0.897 XLE 2.9%: -1.7273 Non AD: -237.93 W AD: -413.88 Green: 5 Red: 6 -413.88

Market Breadth Analysis Reimagined

The Sector Weighted A/D (Advance/Decline) Indicator is an advanced technical tool that measures market breadth by tracking the performance of all 11 S&P 500 sectors with their respective market cap weights. This indicator provides a more accurate representation of market strength or weakness compared to traditional breadth indicators by accounting for each sector's relative importance in the index.

Key Features

  • Sector weighting based on actual S&P 500 market cap allocation
  • Measures daily performance from market open (not prior day's close)
  • Color-coded histogram for directional analysis
  • Comparison with non-weighted A/D line
  • Real-time sector performance display
  • Green/Red sector count for quick breadth assessment
  • Optional NASDAQ comparison

Interpretation

Bullish Signals

  • Weighted A/D histogram above zero and rising
  • Weighted A/D stronger than Non-Weighted A/D (shows strength in larger-cap sectors)
  • More green sectors than red sectors
  • Key high-weight sectors (XLK, XLV, XLY) showing green performance

Bearish Signals

  • Weighted A/D histogram below zero and falling
  • Weighted A/D weaker than Non-Weighted A/D (shows weakness in larger-cap sectors)
  • More red sectors than green sectors
  • Key high-weight sectors (XLK, XLV, XLY) showing red performance

Real Trading Example

Apr 1 Apr 3 Apr 5 Apr 8 Apr 10 Apr 12 Apr 15 Apr 17 -3.0 -1.5 0.0 +1.5 +3.0 Weighted vs. Non-Weighted A/D Comparison

In the examples above, you can see how the Sector Weighted A/D indicator captures significant market reversals. Note the magenta A/D histogram bars showing increasing strength after a period of weakness (yellow bars).

The sector breakdown shows which sectors are contributing to market strength or weakness, with their exact percentage contributions based on actual S&P 500 market cap weights.

Sector Weights

XLK (Technology)

Weight: 27.2%

XLV (Healthcare)

Weight: 14.2%

XLY (Cons. Discr.)

Weight: 11.5%

XLF (Financials)

Weight: 11.0%

XLC (Comm.)

Weight: 8.6%

XLI (Industrials)

Weight: 8.0%

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