Upside Downside Volume Indicator

Upside Downside Volume Definition

The upside downside volume indicator displays the difference of the advancing and declining volume for the New York Stock Exchange. In essence, the indicator is displaying the new flow of volume into or out of the market. Since the value for the indicator will increase over time as more issues are added to the exchange, traders will have to determine the appropriate extreme rating for the indicator where changes in trend can occur. Currently a reading between 200 to 300 million shares is a general area where a change in trend can occur. So, if the upside downside volume indicator hits a +300 million, this would mean that the up volume exceeded the down volume by 300 million shares. At this lofty level, traders will want to protect profits, or completely close out their long positions. For all you history buffs out there, the upside downside volume indicator reached a -602 million during the 1987 October crash.

Upside Downside Volume Charting Example

Courtesy of marketscreen.com: below is a charting example of the upside downside volume indicator that is plotted on the same chart of the Dow Jones Industrial Average. Notice when the the readings approach a positive or negative 200 million shares, it causes a shift in trend.

Upside Downside VolumeUpside Downside Volume

 

Tim Ord
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Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

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