The S&P 500 Index Advance Decline Line calculator below calculates AD Line for SP500 Advance Decline Issues, SP500 Advance Decline Volume, SP500 AD Momentum Volume and SP500 New High/Lows. AD line is a cumulative indicator and because of that, depending on the market, it may run to very high positive or very low negative levels (especially for AD volume). In some cases, it may look like a straight line because AD Line's change becomes small on the background of high AD Line's readings. Furthermore, it is recommended to select calculation's start point not far back in the past and 1 year should be ok for daily values.
By the same reason (cumulative indicator) technical analysis does not look at the Advance Decline Line readings - it analyzes the AD Line's direction. For easier analysis Moving Average could be applied to AD Line. MA applied to AD Line is called as Signal Line as it is used to generate signals. When Advance Decline Line moves above its Signal Line it is a sign of stronger bullish pressure. Controversially, when AD Lie moves below its Signal Line we have bearish pressure stronger.
The S&P 500 Index simple trading system based on the S&P 500 Index Advance Decline Line would generate signals on the crossovers of AD Line and its Signal Line. Our calculator below, in addition to the AD Line and Signal Line, also calculate Histogram - the difference between AD line and Its Signal Line (Histogram = AD Line - Signal Line). This allows tracking signals easier - a "Buy" signal is generated when Histogram turns positive and a "Sell" signal is generated when Histogram drops below zero.