Charting Market Breadth Indicators

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The Histogram, Cumulative, and Invisible chart types are valuable resources for your market breadth analysis in SharpCharts. Using these chart types can reduce the noise on many breadth indicator charts, making it easier to interpret the data. These chart types can be used on the main price plot or in indicator panels wherever needed to smooth erratic breadth data.

But how can we render that on a SharpChart?

To begin, on an open SharpCharts page, look down below the chart in the "Chart Settings" menu (if Chart Settings is not selected, click on it). At the top, under the word "Attributes", there should be a dropdown menu for Chart Type. For a histogram chart, click on the menu to open the dropdown, then select "Histogram". Then, further down in the "Overlays" section, click on the first dropdown under "Overlays" and select "Horizontal Line". Then, finish by entering your desired parameters.

Histograms plot the same data as line charts, but the histogram format makes it easier to see clusters of up or down days. The horizontal lines, defined by the parameters you entered, make it easy to spot overbought and oversold levels. These charts are very useful for any indicator that oscillates around the zero line, including net advances, net advancing volume, and net new highs.

Creating a cumulative chart in SharpCharts is even more straightforward. As with histograms, click on the Chart Type dropdown, selecting the "Cumulative" option. That will convert your chart to a cumulative plot.

A cumulative chart creates a running total of an indicator's periodic values. This indicator adds the periodic value when positive, and subtracts the periodic value when negative. Just like Histogram charts, Cumulative charts are best suited for indicators whose daily values fluctuate between positive and negative values.

Another way to smooth the erratic raw data of market breadth indicators is by using a moving average. But how do you display the moving average without showing the raw data? This is done using the Invisible chart type.

As before, we'll click on Chart Type, where we'll choose "Invisible" from the list of options. Then, going down to Overlays, we'll select "Simple Moving Average" from the first dropdown, and then "Horizontal Line" from the one right below it. Complete the chart by entering your desired parameters.

With Invisble charts, the SMA line smooths out the values and creates a less “noisy” oscillator. This makes it easier to see and act on signals like zero-line crossovers. While Cumulative and Histogram chart types are used almost exclusively with market breadth indicators, the Invisible chart type can be useful for other ticker symbols, especially those showing a lot of volatility. This often happens during periods of consolidation.

See these instructions visually in this step-by-step demo!