The formula is:
- 1) Calculate (price/previous - 1.0) for each split adjusted stock
- 2) Accumulate the result from step 1) for approximately 4000 participating stocks
- 3) Multiply the total in 2) by 100.0 and divide the number of participating stocks
Below is a link to the Barchart.com market momentum index chart (barchart symbol: $BCMM). The spikes to the upside above 103 which indicates a strong breadth thrust and is your chance to go long fundamentally strong stocks breaking out of good bases.
As always use proper position sizing and stops to protect from losses.
market momentum index