Breadth indicators are also referred to as market internals. As the “vital signs” for an index or sector, breadth indicators reflect aggregate performance for the individual components. As such, breadth indicators can provide leading signals by strengthening before a bottom or weakening ahead of a top. After all, the whole is only as good as the sum of the parts
This video and article explain the breadth indicators used in the Index Breadth Model and the key levels used to generate signals. Stock market breadth plays an important role in broad market analysis because it reflects what is happening under the surface. Price action, in contrast, shows us what is happening on the surface.