Volume Tutorial:
Upside/Downside VMA's
The Following charts are examples of VMA surges to the downside (buying
volume) and
VMA surges to the upside (selling
volume).
Below we have an example of
multiple volume surges, some occurring to the downside
(in red) and some to the upside
(in green). A VMA surge to the downside
caused the index to go up, and a VMA surge to the upside causes the index
to go down.
Above there were 3 VMA surges to
the downside that caused the index to begin to move up, but then there
was a VMA surge to the upside that caused the index to move down again.
Why did the single VMA surge to
the upside cause the index to move down when there were 3 VMA surges to
the downside?
That's because the VMA surge to the upside was
MUCH larger than the VMA surges to the downside.
When we change the VMA period to a
15-Day VMA, it becomes more difficult to see the VMA surges. But in general
the same principal still works. The VMA increase (surge) to the downside
(in red) causes the index to go up, and the
VMA surge (increase) to the upside (in green)
causes the index to go down.
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