A market breadth indicator that measures the cumulative difference between the number of advancing and declining stocks on an exchange. It helps assess the overall health and direction of the broader market. When the index rises alongside stock prices it confirms broad participation in the rally, while divergences can warn of a narrowing advance.
Example
“The Advance/Decline Index diverged from the S&P 500, suggesting the rally was being driven by only a handful of large-cap stocks.”