[MC]

Price action always rules, but this gives a good glimpse into the health of the markets IMO.



So we already know nothing but price action is always 100% correct, otherwise we'd all be rich. But if you look at UVOL/DVOL expansion or contraction in relation to each other you can often get clues on which is the right side of a trade. Background weakness/divergence combined with a crossover can be a VERY powerful tool, as can just a simple crossover though often to a lesser extent.

Notice Thursday, wicked divergence, basically hidden selling. So you have UVOL smashing DVOL all day but most the day was consolidation. And it ended with a surge of UVOL but very light price action.

I'd like to have more a discussion on this and have it centralized, so though I've posted these charts before on other threads, at Walt's suggestion I'm making it a dedicated thread and have brought in my prior charts.

[MC]

Below was a 5 minute chart. Walt wanted to see the 1 Minute, I can only really do 1 day to be able to keep it reasonably viewable. The 1 minute can improve your entry by showing a more granular look at just when the crossover happens.

This is a simple way to do so many things. I don't care what your style is, IMO this setup can benefit your timing and overall market awareness.

Let's open the floor to discussion at this time.

[walterw]

Nice Mike... good job ¡¡ hope your surgery does ok... we will try to get this on and running anyway.. cheers Walter.

[MC]

Todays installment.

[Brookwood]

Thanks for the posts. I came across this method when OpenTick was down for a server relocation and I needed alternative internals.Do anyone know which data provider may have an UVOL/DVOL ratio calculated like the ADD (advancers/decliners) ratio? Or which platform may allow the ratio to be programmed /calculated as a single line

[edeeb]

any ideas of how one could quantify a divergence such as this? divergence using MACD has been talked about as being a good signal, but haven't seen any results quantified.

have been pondering how one would work with a programmer to have divergence between price and other equity specific internal information used as an automated strategy, but not sure how to go about it. other ideas welcomed

[Head2k]

Originally Posted by Brookwood »

Thanks for the posts. I came across this method when OpenTick was down for a server relocation and I needed alternative internals.Do anyone know which data provider may have an UVOL/DVOL ratio calculated like the ADD (advancers/decliners) ratio? Or which platform may allow the ratio to be programmed /calculated as a single line

I use AmiBroker and it could be easily programed in it. A code three lines long.

[lordbinder]

even in metastock you can do the formula with 1 line, dividing one by the another and thats it