Market Breadth v2

What this indicator is

Market Breadth ETH is a market-structure and participation indicator that overlays market breadth data directly onto the price chart.

Instead of showing breadth (advance/decline, volume participation) in a separate pane, this script translates breadth into price-scaled levels and lines, allowing you to see:

Whether an uptrend or downtrend is broadly supported or narrow and fragile

Where weak trends leave structural “footprints” behind

When price is moving with or against underlying market participation

In short, it helps answer:

“Is this move real, or is it running on borrowed strength?”

Why market breadth matters

Market breadth measures how many stocks are participating in a move.

Strong markets rise with many stocks advancing together

Weak markets often rise with only a few large stocks, while the rest lag or decline

Price alone does not reveal this difference.
Breadth does.

This script’s purpose is to merge breadth and price into one visual framework so you can judge trend quality, not just direction.

Core components and how they work
1. Breadth data inputs (the foundation)

The script pulls three market-wide data series:

Advance/Decline (ADVDEC) – net advancing minus declining stocks

Advance/Decline Volume (ADVDECV) – volume-weighted participation

Total Volume (TVOL) – context (not directly used in logic)

These values represent market participation, not price.

They are restricted to regular trading hours (RTH) so overnight noise does not distort the signal.

2. The advance line (participation context)

The script builds a cumulative advance/decline volume line:

Volume is only accumulated during RTH

The cumulative value is log-scaled

Why log scaling?

Breadth volume can grow extremely large and volatile.
Log scaling compresses it into a usable range while preserving trend information.

This advance line is not plotted directly, but it is used to:

Measure recent breadth highs and lows

Define whether participation is expanding or contracting

3. Daily breadth range (strength vs weakness)

Each day, the script tracks:

The high and low of the advance line

Stores the last 3 completed days

From this it derives:

A recent breadth high

A recent breadth low

A midpoint

These are used to classify participation as:

Strong

Neutral

Weak

This classification feeds into the trend background color, which acts as a quick health gauge for the market.

4. Anchors and scaling (how breadth becomes an overlay)
This is the most important design concept.

Breadth values cannot normally be plotted on a price chart because:

They exist in a completely different numerical scale

This script solves that by anchoring and scaling breadth to price using two reference points:

Prior session close

Current session open

Using these anchors, the script:

Normalizes breadth relative to its recent maximum

Scales it proportionally into price space

The result is the Derived Breadth Line.

5. The Derived Breadth Line (the heart of the indicator)

The Derived Breadth Line is a price-level representation of market participation.

How to read it:

Its position relative to price matters

Its color matters

Its interaction with price matters

Think of it as:

“Where price should be if participation were perfectly aligned.”

Interpretation:

Price above the breadth line → price may be outrunning participation

Price near or below the breadth line → participation is supporting the move

6. Breadth line color (strength signal)

The breadth line changes color based on internal conditions:

Green → strong participation, supportive breadth

Yellow → mixed or transitional conditions

Red → weak participation, internal selling pressure

The color reflects breadth health, not price direction.

A rising price with a yellow or red breadth line is often a warning sign.

7. Smoothing and “sync”

The script calculates a smoothed version (ALMA) of the breadth line.

When:

The raw breadth line and its smoothed version are close

The market is considered “in sync”.

Signals are emphasized when this condition is met because:

It filters noise

It indicates consistent participation behavior

8. Imbalance shading (pressure visualization)

The script compares:

What price movement implies

What breadth movement actually shows

When breadth underperforms price, the area around the breadth line is shaded.

Darker shading = stronger imbalance.

This visually highlights hidden selling pressure that price alone does not show.

9. Extended daily lines (trend strength memory)

This is one of the most powerful features.

What these lines are:

At each session close, the script draws a horizontal line at the derived breadth level

The line extends forward in time

The line remains active until price trades through it

What they represent:

These lines are breadth-based structural memory.

They show:

Where prior participation conditions were “left behind”

Whether price has resolved those conditions or not

Weak vs strong trends (key concept)

Strong trends

Do not leave many unresolved lines behind

Price continues forward without revisiting them

Weak trends

Leave red lines overhead during uptrends

These lines represent weak participation that was never repaired

They often act as future resistance or reversal zones

An uptrend with many red breadth lines above price is structurally fragile.

10. Line distance imbalance (pressure stacking)

The script sums:

Unresolved lines above price

Unresolved lines below price

Only within a user-defined range

It plots:

Positive distance (overhead pressure)

Negative distance (support below)

Net balance

This gives you a quantitative sense of:

Whether pressure is stacked above or below price

Whether the market has “room to run” or is boxed in

When this indicator is most useful

This script is especially effective for:

Index trading (ES, NQ, SPX, etc.)

Trend quality assessment

Identifying weak rallies

Context for intraday and swing trades

Risk management (when not to chase)

It is not a signal-only indicator.
It is a context and structure tool.

How to use it in practice
Practical workflow:

Check the breadth line color

Green supports continuation

Yellow = caution

Red = risk

Compare price vs breadth line

Price far above line → fragile

Price near line → healthier

Look at extended lines

Many red lines overhead → weak trend

Few or none → stronger trend

Watch imbalance shading

Growing negative shading → internal pressure

Combine with your entries

Use this to filter trades

Avoid chasing moves with weak breadth

Summary

Market Breadth ETH turns invisible market participation into visible price structure.

It helps you:

Judge trend strength, not just direction

See where weak trends leave unfinished business

Understand when price is being supported — or quietly undermined

Think of it as a market quality lens that sits on top of your chart.

If you want, I can also:

Write a short TradingView publish description

Create example trade scenarios

Add a “how not to use it” section