What is the Sibbett's Demand Index based on?

The Sibbett's Demand Index is primarily based on volume over a specified number of days. This index focuses on measuring the buying and selling pressure in a stock or market by analyzing trading volume. It seeks to capture the intensity of demand through volume dynamics rather than just price movements.

Volume data provides insights into market activity—higher volume often indicates stronger interest and can signal potential price movements. The Sibbett's Demand Index specifically uses this volume analysis to help traders identify bullish or bearish conditions in the market, allowing them to make more informed decisions based on the underlying demand for a security.

In contrast, the other options do not accurately represent the focus of the Sibbett's Demand Index. The ratio of advancing to declining stocks looks at market breadth, price movements focus on price action without considering volume, and trends in initial public offerings concern new issues entering the market rather than established trading dynamics.