Observing Market Volume Activity Hourly

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by: vixiananyseia
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Word Count: 359
Date: Thu, 10 Feb 2011 Time: 2:39 AM
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When you go to the dentist they routinely inspect your teeth, gums, and any additional cavities. The dentist keeps track of this so that they can check for any unusualness. They have a profile on each client and review it each time you come in. The same can be said for the stock market with day-to-day stock tape volume movement.

Keeping track of the daily market volume is very helpful in determining the general health of the market. Noting low volume days is also important. Low volume up days can be suspect. Low volume down days can be seen as positive and is normal. Big volume up days is a sign of accumulation. Big volume down days is a sign of distribution. These large movements in the general market volume is a sign of big players moving money around. These big players are the ones that really move the markets up or down on big volume. Keeping tabs on them is very important because you always want to be on the same side that they are on.

Having repetitive heavy distribution days within a month or so can be seen as negative for the general market because institutions might be getting out. Usually anywhere from 5 to 6 big volume down days can change the uptrend of the market. This can lead to a correction or even worse a bear market.

Being able to see the market volume action on a daily comparison view is very helpful. It makes it very easy to compare the previous days volume action. Also, viewing the volume either in minutes, half-hour increments, or one hour increments is very helpful in determining any changes in the volume trend of the markets. Two notable sites that offer half-hour volume comparison is Barrons within the market lab section or Smart-Ticker within the NYSE or NAS volume button updated every 2 minutes.

Just like the dentist keeps tabs on your teeth with simple procedures, the same can be said with the general market by using volume. Noting daily market volume action is very helpful in determining the health of the market.

About the Author

Vixiana Nyseia posts about the investment markets & stock volume. She also authors about some of the regulatory compliance debates of the day. On her weeks off she walks on the shore and does Exercise.