How is the Bolton Tremblay Index calculated?

The Bolton Tremblay Index is calculated by using the ratio of advancing issues to unchanged issues. This method captures the movement within the market that reflects stocks that are actively increasing in value compared to those that remain neutral in their price performance.

This index serves as a market breadth indicator, focusing on how many stocks are moving positively versus those that are not changing, which can provide valuable insight into the general market sentiment and strength. By emphasizing the relationship between advancing and unchanged issues, the Bolton Tremblay Index effectively highlights the dynamics of stock performance and can help analysts gauge whether a market trend is strong or has underlying weaknesses.

In contrast, the other options do not accurately represent how this index is defined. For instance, dividing advancing issues by declining issues focuses on the contrast between gaining and losing stocks rather than capturing the neutral stance of unchanged stocks. Summing the total volume of stocks does not reflect the breadth of the market, while finding differences in net advancing stocks primarily looks at the net change rather than maintaining the context of unchanged issues. Thus, the correct approach aligns closely with how the Bolton Tremblay Index is intended to function.