From Bespoke Invest:
The 10-day advance/decline line is a widely followed breadth indicator that is used to measure both the health of a move as well as inflection points. It is calculated by finding the average daily number of advancers minus decliners over the last ten trading days. Below we highlight a chart of the 10-day advance/decline line for the S&P 500. As shown, the recent rally has put the 10-day A/D line well into overbought territory and at a level that has indeed marked a peak during prior rallies in the past year. During the rally in early December and the initial rally off the March lows, the 10-day topped out right where it is now. After 12 up days for the Nasdaq and an average gain of 13% for S&P 500 stocks since July 10th, it’s time for a breather.