How broadly is the market trading? That is, if 60% of the stocks in the S&P 500 (as of 11:37 am New York time) are trading to the upside, and 30% are trading to the downside, and 10% are unchanged...then that ratio is 2:1.
Why does this even matter? Well, you can imagine that if, say, oil is up a lot on a given day...since it carries huge market valuations or capitalization, it'd skew the overall market on its own. Like...if a bomb went off in Riyadh and oil is up 5% (along with the underlying stocks), then the overall market might show itself as being up, say, 0.5%. But 2/3 of the stocks in this scenario would likely be down. So even though the market as a whole index is up a bit, the upside/downside ratio is like 1:3, with the vast majority of stocks trading to the downside instead of the up. So yeah...the market direction taken as a whole in a single number can be misleading.
