By Marco BösingWhat Are Market Internals?
Market internals are a group of real-time indicators that measure the internal strength of a stock market. Rather than looking only at the price of an index like the S&P 500, market internals reveal what is happening beneath the surface — how many individual stocks are actually advancing or declining and how trading volume is distributed.
The most important market-internals indicators are the TICK Index (number of stocks on an uptick vs. downtick), the ADD (Advance-Decline Difference, net advancing vs. declining stocks), and VOLD (volume of advancing vs. declining stocks). Together, they provide a nuanced picture of actual market sentiment.
For day traders, market internals are especially valuable because they can uncover divergences between the index price and underlying breadth — a signal that a move may not be sustainable.