[3] If the index moves up while the ADL moves down, the index may be misleading about the true direction of the overall market, as happened toward the end of the US Dot-com bubble in 1999–2000,[4] when the indices continued to rally while the ADL diverged downward starting at the beginning of 1999.
[7] However, these results should be interpreted as a decline in the market, no matter that the index has experienced an increase.
In such a case it is reasonable to conclude that by the end of the trading day the index will decline.
Additionally, a market that experiences a trend toward either a decline or an advance is highly unlikely to reverse its movement immediately on the next trading day.
Advance–decline numbers can be also used in your daily observations of the trades to determine whether a particular trend is a false or a spot.