Unlike the conventional advance/decline which is a running total of the net advances-declines, the figure plotted here is a running total of the daily ratio of (advances-declines)/(advances+declines+unchanged). I believe this is a better measure since the conventional measure is distorted by the fact that the number of issues traded has grown significantly since the 60s.
The advance/decline line peaked in 1966 and then bottomed in 1975. A
significant Elliott Wave complex correction concluded in 1982. This
pattern was most likely only the first leg of a flat. The second leg
of the flat appears to have taken the form of a limiting neutral
triangle. In a neutral triangle the third leg is the longest and the
lines that bound the points b-d and points a-e are roughly parallel.
Wave {B} which has been in progress since 1982 has completed 4 legs.
The fifth leg will very likely take the form of a flat. A retest of
the lows made late last year is likely before the flat begins its
third leg up. When wave {B} completes, we should begin a vicious
decline which will take us to the 1982 lows.
The advance/decline line typically peaks before the price indices but
lags market bottoms. The advance/decline line peaked early last year
and has not confirmed the new highs in the market averages.
Historical Perspective (3-month chart)