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Watching the Volume
January 7th, 2009 at 12:27pm · 2 Comments
It looks has if the S&P rollover is for real here. Here’s my volume oscillator on the 5 minute eMini chart. Notice that during the 90 minute rally attempt in the late morning the oscillator just kept heading lower. That’s bearish.
Tags: Day Trade · General Market Commentary · S&P 500
2 responses so far ↓
1 Aronny // Jan 7, 2009 at 1:03 pm
How do you smooth the Volume Oscilator? I noticed it goes back to 0 at the beginning of each trading day. This makes it difficult to apply any moving average or momentum indicator.
2 chris // Jan 7, 2009 at 1:37 pm
Yes, volume does reset to zero each day, so the utility of this indicator is limited. It’s a 4 period smoothing with a Jurik moving average, so it really has no utility at all before 10AM Eastern time. For me it’s use is in separating trend days from choppy days, as in trend days in seems to clearly open on one extreme and close on the other. It’ inability to rally when the eMini’s rallied tells me today may be a trending day and this indicator and the eMini may close on their lows. That info then has implications for the bigger picture, but the indicator can’t really be referenced to past days as it does reset to zero.
Volume doesn’t seem to lead price in the way that the tick can, but it seems to keep price ‘honest’ – in that it doesn’t fall for the superficial moves as much. Hope this helps.
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