Advance Decline Momentum Volume

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Patent #: US 7,831,984 B2
MarketVolume®'s technology of displaying and presenting intraday volume and volume based technical indicators is protected by copyright law and patent. Unauthorized distribution or reproduction of proprietary technologies will be prosecuted to the maximum extent possible under the law.

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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