Breadth Exceptions
There are specific rules to follow when breadth exceeds certain thresholds. These exceptions help avoid entering trades when the market becomes overextended.
Rule 1: Breadth Over 75%
● Once Bull List % rises above 75,
→ Only enter new trades if breadth is still increasing
Example:
● Breadth rises: 69 → 75 → 78 → 80
● Then falls: 80 → 78
→ Do not enter new trades once breadth starts contracting
Risk Management Above 75%:
● Treat >75% as a potential overbought zone
● Only add trades if breadth continues climbing
● If breadth flattens or declines,
→ Halt all new entries
Rule 2: Wait for a Cycle Reset
● If breadth changes direction or starts contracting,
→ Wait for a cycle reset
A cycle reset =
A new bullish crossover point in breadth
Rule 3: Sector Trades After Market Reset
● After a market reset, it is possible to trade sectors
→ Even if overall market breadth is high
→ As long as sector breadth continues to rise
Example:
● A trade taken immediately after a market reset
→ Led to strong gains without waiting for a full pullback
Summary:
● If breadth is increasing,
→ Open new trades
● If breadth is contracting,
→ Hold existing positions
→ Do not open new trades
● If both market and sector breadth cross over to bearish,
→ Exit all trades
→ This includes selling long positions or initiating short trades
© Copyright 2025 OVTLYR - All rights reserved.
5830 Granite Pkwy, Suite #100, Plano, TX 75024, USA
Contact now at support@ovtlyr.com