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When it comes to Advance/Decline line patterns and listening to its messages, I am a big fan of watching support lines and watching to see if the A/D line is diverging against the broad markets. As you can see in the right chart, the A/D line remains above support dating back to the 2009 lows (a positive) and it has not had a big divergence against the broad markets for years. Last multi-month divergence was back in 2007!
On a short-term basis I am watching to see if the A/D line could be making a “Head & Shoulders” topping pattern (left chart). Humbly, I am not a huge fan of this type of pattern being applied to the A/D line. I do respect the pattern enough that I will listen to it and respect its potential, until this pattern proves differently.
A head and shoulders pattern is also a very distinct possibility in the DOW.