Dan Sullivan Says Advance/Decline Line Signals Powerful Bull

By on April 9, 2010

Peter Brimelow reports that Dan Sullivan is bullish based on his interpretation of the A/D line.

Dan Sullivan of The Chartist cited the A/D line when he went bullish last spring after being out of the market for fifteen months. ( See April 23, 2009 column.) He counted three A/D buy signals last year and reports the A/D Line (which “usually tops out many weeks before the widely followed averages”) is still making new highs.

He’s fully invested and is recommending that aggressive traders use margin.

The A/D line is a celebrated technical tool that gauges market momentum by weighing stocks that increase and decrease in price. Sullivan regards a ratio above 2 to 1 as a buy signal. There have only been 18 such buy signals in the last 60 years. There were three in 2009.

Source: Marketwatch
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