What does double divergence involve in market analysis?

Double divergence in market analysis is characterized by the occurrence of two consecutive negative breadth indicators. This concept reflects a weakening market trend, where even as prices may reach new highs or maintain their levels, the breadth of the market—represented by the number of advancing versus declining stocks—fails to confirm this strength.

In the context of technical analysis, a breadth indicator measures market participation, and negative breadth signals suggest a lack of underlying strength to sustain price gains. This type of pattern can indicate a potential reversal or correction, alerting traders and analysts to be cautious about existing bullish positions.

The other options do not accurately describe double divergence. A single breadth indicator signal does not provide enough information for double divergence. A divergence and thrust signal refers to a different technical concept involving price movements and momentum rather than breadth indicators. A reversal of previous market signals also doesn't align with the specificity of double divergence, which is focused solely on consecutive negative breadth indicators reflecting market weakness.