Solid Gains On Big Volume Provide A Quantifiable Edge

What was most striking about today’s action was the volume. Frequently you see high volume occur on a washout day like Tuesday or even a rebound day like Wednesday. According to my data provider, while Thursday’s trading didn’t see the range that the previous two had, it did register the highest NYSE volume since March.

High volume on an up day is typically seen as a sign of institutional accumulation. It is generally thought to be a good thing. I put today’s action to the test:

Very impressive results. Winners swamp losers both when looking at the percentage of wins and the size. Also notice the healthy profit factors in the last column. (Profit factor = Gross Gains / Gross Losses.)

Historically, high volume days under the 200-day moving average where the market is up strongly like today seem to have provided a nice upside edge over the next 1-20 trading sessions.

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