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The NYSE Advance-Decline Line Is the Most Important Chart of the Year: StockTwits

NEW YORK (TheStreet) -- Momentum tech stocks have gotten slammed over the last three months. So have many biotech stocks.

The S&P 500 isn't doing much better, either. So far this year, it's up roughly 1.5%.

But today something happened that every investor should see. It could be an enormous bullish signal for the stock market.

The NYSE Advance-Decline Line, in its simplest form, is a measure of all the stocks rising vs. all the stocks declining on a given day. The metric is a powerful way to gauge market breadth.

Today, the NYSE Advance-Decline Line hit a new all-time high on a cumultive basis. Think about what that means for second. Despite all the carnage in momentum stocks, and despite the fact the S&P 500 is only up 1.5%, there's still a large basket of stocks steadily increasing each day:

Adv/Dec line hitting all-time highs with $SPY Flat YTD and $IBB and Social $FB $TWTR soft. $STUDY Chris Kimble (@KimbleCharting) Apr. 24 at 12:01 PM

If you're wondering what predictive power the NYSE Advance-Decline Line might have, here's a chart of it before the 2008 Financial Crisis:

NYSE Advance-Decline line in 2008 - $STUDY: stefan cheplick (@scheplick) Apr. 24 at 07:29 PM

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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