Not all stocks belong in a breadth calculation. The $3 minimum price and 100k average daily volume filter removes noise stocks that would otherwise distort the signal. Here's the logic behind it.
Raw breadth calculations count every listed stock — including penny stocks, near-bankrupt companies, and thinly traded shells that can swing 20% in a session on a few thousand shares of volume. If those names dominate the count, the breadth signal tells you more about speculative froth in microcaps than about the health of the investable market.
The WideRadar universe applies two quality gates before any stock is counted in any breadth metric: a minimum closing price of $3 and a minimum average daily volume of 100,000 shares over the prior 35 days. These two filters together define the investable US equity universe — the stocks a real trader could actually participate in.
The $3 threshold sits at the conventional boundary between microcap and investable equity. Below $3, stocks often trade on thin spreads with wide bid-ask gaps, and their price moves are frequently dominated by market-maker inventory adjustments rather than genuine directional pressure. Including them in a breadth count would add noise, not signal.
Crucially, the price filter applies to the price before the move, not the closing price on the day being counted. A stock that was $2.50 and jumps to $3.20 in a day does NOT count — even though it ended above $3. A stock that was $4.00 and falls to $2.80 also does NOT count on that day. Only stocks that were already above $3 before the measurement window contribute to the breadth calculation. This prevents speculative bubbles in sub-$3 names from inflating the breadth count during low-quality rallies.
100,000 average daily volume is a practical minimum for institutional participation. A stock averaging fewer than 100k shares per day is too thin for most professional size to enter or exit without significant market impact. Including thin stocks in a breadth count means including names where the price move reflects a single buyer or seller rather than broad market demand.
The 35-day lookback for the volume average is long enough to smooth out abnormal volume days (e.g. post-earnings) while remaining current enough to include stocks that have recently become liquid. A stock that became popular last month and now trades 200k shares/day passes the filter; one that had one 500k-share day six weeks ago and then went quiet does not.
Applying these filters produces a universe of approximately 4,000–5,500 tickers on any given day (the exact number shifts as stocks move in and out of the filter). This universe is:
When you see a 4%+ up/down ratio on WideRadar, you are seeing the genuine pulse of the investable US equity market — not a count distorted by penny stocks and illiquid shells that have no bearing on your actual trading.
Sources & References
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