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Thursday, March 22, 2012

Stock Market - interpreting volume

I watch $UPVOL - $DWNVOL (NYSE, up-volume is trading volume for shares increasing in price, while down-volume is trading volume for shares decreasing in price.  $UPVOL minus $DWNVOL is the difference in trading volume.  On market-down days, the difference will be negative, while on market-up days, the difference will be positive).  I have watched it for a long time, but today I gained more insight.

What I realized:


  • Constant slope means:
    • - No rate of change, no acceleration, constant speed.
    • - The rate of things changing is staying the same.
  • The size of a bar
    • - shows the amount of accelaration
    • - or rate of change
    • - continued acceleration down, changing slope down, shows panic
  • Downward direction means:
    • - The difference in the volume of stocks,  upVol vs dwnVol, is more down vol.
  • A change in the direction (e.g., slope up instead of down) of the slope
    • - shows a change in the sentiment

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