Ask Colin

Why are there differences between sources for advances and declines data?

I think the reason the advances and declines differs between sources is that they have used different definitions. For example, one data supplier provides advances and declines only for the stocks in the All Ordinaries Index, whereas other suppliers may use all the stocks listed on the ASX.

Other decisions made in the definition include whether to include both fully paid shares and also contributing shares, instalment receipts, preference shares, company options, warrants, equity and property trusts and so on. So, there is plenty of scope for differences between sources.

It seems to me that there is no right or wrong answer, though my preference would be for all fully paid shares. The key thing is to use a consistent source so there is not a definition change from day to day.

I have looked on the AFR website and I cannot see where they are showing the daily advances and declines.

Since writing this I have learned that the ASX bases advances and declines on a price determined before the opening each day, during the opening auction, I assume. The results seem similar for using the previous day closing price, but I have not done any detailed comparisons as I no longer use this indicator myself. As I said above, the key is to use a consistent source.