| DEC 1989
Volume percentage ratio by Mike Burk
Volume percentage ratio by Mike Burk Volume is best used as a confirming indicator for general market trends and, in developing stock market indicators, I've found a trio of volume calculations that work well in anticipating cycle tops and bottoms. My basic volume indicator (Figures 1 and 2) is an exponential moving average of total volume with a 0.04 smoothing constant. It is plotted on a normal Y scale, that is, high values are the top of the scale. Although I have chosen the Dow Jones Industrial Average to represent prices in these charts, broader indices such as the New York Stock Exchange Index or Standard & Poor's 500-stock index give similar results. The volume indicator usually begins to rise shortly after prices begin to rise and begins to fall shortly after prices begin to fall. Volume has risen fairly steadily from the first of 1978 (which is as far back as my data files go) until the peak in August 1987. There was a volume spike at the time of the October 1987 stock market crash, after which volume declined until shortly after November 1988. Since then, volume has risen with prices.
by Mike Burk
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.