Custom Formula Collection

The Absolute Breadth Index (ABI) is a market momentum indicator that was developed by Norman G. Fosback. The ABI shows how much activity, volatility, and change is taking place on the New York Stock Exchange while ignoring the direction prices are headed. You can think of the ABI as an "activity index". High readings indicate market activity and change, while low readings indicate lack of change. In Mr. Fosback's book, Stock Market Logic, he indicates that historically, high values typically lead to higher prices three to twelve months later.

The MetaStock formula for the Absolute Breadth Index is:

ABS ( Advancing Issues - Declining Issues )

To plot it:

• Create a composite security of the Advancing Issues - Declining Issues. In Windows versions use The DownLoader^TM to create the composite or in the DOS versions use MetaStock's File Maintenance to create the composite.
   
• In MetaStock open the composite and plot the custom formula ABS( C ) on it.

For interpretation refer to the book Stock Market Logic by Norman G. Fosback.