Why are my stocks falling when the index rises? Reading breadth and concentration

1. What actually rose when the index rose?

KOSPI uses a market-capitalization-based calculation. Price changes in different companies do not have equal influence. A large index constituent can rise enough to offset declines in many smaller companies. Reading a 1% KOSPI gain as 'most Korean stocks rose 1%' therefore starts with the wrong comparison.

Breadth changes the question to a count. Advancing, declining and unchanged stocks show how widely that day's movement was shared. A small company and a large company each count as one, so breadth can reasonably disagree with a capitalization-weighted index. More advancing stocks alone does not tell you their average return or the size of their gains.

Start with a suitable benchmark. A watchlist concentrated in KOSDAQ is unlikely to be explained fully by KOSPI. Compare the index and breadth for the same market first, then narrow the investigation to the sectors and company sizes you actually follow.

Sources: KRX — KOSPI overview and calculation

2. Worked examples: 40 advancers and a 0.8% index gain

The first fictional market contains 100 stocks: 40 advance, 50 decline and 10 are unchanged. Advancers represent 40% of all stocks. Excluding unchanged stocks produces 40 ÷ 90, or approximately 44.44%. Neither result is wrong; the denominators differ. Net advancing breadth is (40 − 50) ÷ 100 = −10%, which is not a −10% index return.

The second example is a separate fictional capitalization-weighted basket. One stock starts with a 30% weight and gains 5%; the remaining 70% has a weighted return of −1%. The basket gains 0.8%. This is not a calculation from the preceding 100-stock distribution. It isolates the weight effect and omits actual index adjustments such as membership and share-count changes during the period.

Advancing share = advances ÷ (advances + declines + unchanged) × 100 Excluding unchanged = advances ÷ (advances + declines) × 100 Fictional basket return = 0.30 × 5% + 0.70 × (−1%) = +0.8%

3. What should a divergence make you investigate?

If the index rises while decliners outnumber advancers, ask whether a few heavily weighted companies supported the index. The concentration screen identifies large weights; check those companies' price moves separately. A high weight establishes potential influence, not a measured contribution to that day's index return.

If the index edges down while more stocks advance, investigate whether weakness in large constituents coexisted with rebounds elsewhere. Neither pattern establishes that the index must soon catch up or that other stocks must soon fall. Sector earnings releases, company-specific news and the chosen period can produce similar-looking divergences through different processes.

The practical result is a better comparison, rather than an automatic trade. Separate the broad market, sector and company-specific explanations when reviewing a holding. A decline on a day when most stocks fell calls for different follow-up from a decline in one company while its sector rose broadly.

• Index up, breadth weaker: check the largest weights and the sectors that did not participate.
• Index weak, breadth improving: distinguish large-stock influence from the size of rebounds elsewhere.
• Index and breadth both rising: record broader participation, leaving persistence as a separate question.

4. Connect four screens after the close

Begin with the KOSPI or KOSDAQ indicator below and record its observation date and daily move. Open Market breadth for the same market and date. TapeFlow's advancing share divides by the full stock count, including unchanged names. If another service excludes unchanged names, use the calculator to put both readings on the same denominator.

When the two disagree, open KOSPI or KOSDAQ heavyweight concentration to match the market you are comparing and identify its largest weights. Then use Korea Sector Flow to find sectors and individual contributors worth researching. Its estimates multiply foreign and institutional net share counts in selected stocks by closing prices. They are neither sums of actual execution values nor official totals for every stock in a sector.

Move from broad to narrow: 'KOSPI rose → fewer than half the stocks advanced → what happened in my sector?' The purpose is to finish with one or two specific companies or sectors that need an explanation, rather than to visit every screen.

5. Daily breadth is different from participation above the 20-day average

Daily advancing share measures one day's price direction. The share above the 20-day moving average compares current prices with their recent trend. A stock can rebound today after several declines, and a stock falling today can remain above its 20-day average. Different readings are not necessarily contradictory.

On this site, participation above the 20-day average and 20-session high-low readings use a sample of large-cap stocks with sufficient price history. Do not assume that sample matches the full-market count used for daily advancing share. Changes in sample coverage or observation dates can explain part of a change in the result.

Pairing an intraday index with yesterday's closing breadth, or KOSPI prices with KOSDAQ breadth, can create an artificial divergence. Distinguish the page's update time from the underlying observation date. If the dates differ, record the mismatch before interpreting the comparison.

6. A weekly note that remains comparable

At the weekend, place each day's index direction and advancing share side by side for the same market. The average of daily advancing shares summarizes daily participation; it is not the share of stocks that gained over the week. Weekly breadth requires comparing each stock's price at this week's end with its price at the previous week's end.

Use this copyable format: 'Observation date __ / market __ / index change __ / advancing __, declining __, unchanged __ / advancing share __ / facts checked about large constituents __ / separate move in my sector __ / explanation still unverified __.' The final field keeps a hypothesis visibly separate from an established fact.

Next week, ask not only whether the index gained, but also whether participation widened and reached the sectors you follow. A consistent record turns 'the market is fine but my stocks are not' into a question you can investigate.