Technical Analysis, Studies, Indicators:
Advance Decline
Momentum Volume
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We have developed a new intraday indicator (never
before made available), which we call "momentum advances and declines volume"
("Momentum AD Volume)".
Decline Momentum volume is volume on stocks (issues)
that have fallen in price compared to their close on the previous bar. To
compare - Decline Volume is cumulative volume on stocks (issues) that have
fallen in price compared to their close on the previous trading day.
Advance Momentum volume is volume on stocks (issues)
that have risen in price compared to their close on the previous bar. To compare
- Advance Volume is cumulative volume on stocks (issues) that have risen in
price compared to their close on the previous trading day.
Chart 1. S&P
500 5-day intraday (one bar = 15 min)
Advances and Declines Momentum Volume (Momentum AD Volume)
Momentum AD volume shows the actual number of shares that
traded in the advances and declines volume segments (for a given bar). Advances
momentum volume reflects the actual volume of those stocks that presently belong
to the advances group. For declines momentum volume, simply adapt the above
explanation.
Momentum AD volume readings are not affected by the volume
activities of previous bars (i.e., these readings are not cumulative) - they
simply reflect the volume activity that is currently taking place within the
present bar (whatever the length of that bar). For instance, the chart above
reveals that on July 27, even though the S&P 500 index traded in positive
territory right from the opening bell, the trading activity of the stocks in the
advances and in the declines groups were almost identical. However, note how at
the end of the day,
the activity of the stocks in the advances group increased
dramatically - you can see a big surge of advances
momentum volume (the green line) toward the end of the day.
The main difference between momentum
AD volume and cumulative
AD volume is that momentum AD volume readings are not cumulative; they simply
reflect the volume activity associated with a particular bar.
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