Watching Market Breadth

This morning, sadly I must admit that I got squeezed out of a portion of a few of my trades-GNK and MDR to be exact. I didn't cover them entirely, but half of each position due to the squeeze that started yesterday and continued today. I had to give up my PRU Tuesday and about 1/3 of my SKF. I've since added my SKF back-which cost me a little $$$ and I'm considering my other positions as well. I'm long SKF, short PAC, SPSX (also had to cover half of that yesterday or the day before), HIG, MDR and GNK.

The point of the story is this, I've been noting a divergence between the NYSE Advance/Decline line and the NYSE-also the NASDAQ A/D line. Had I the presence of mind to check it this am, I probably would have held through this am's pop. In any case, the positions were too large so I guess it's a wash.

The A/D lines for both Indices are way divergent-on the negative side. This means the averages were advancing (especially this am, real bad) however, fewer and fewer stocks were participating in the advance. The market was/is growing without a solid base. Another indy I've been watching is the TRIN index-which was fairly positive Monday on the advance, but has since slipped into the distribution side. So, check out your favorite breadth indicators often-they'll tell you part of the story you won't get anywhere else.