[RT] NASDAQ-100 Equal-Weight Index Volume Indicator

[Pete Lieber <plieber@xxxxxxxxxxxxxx>]

Today I examined the NASDAQ-100 Equal Weight Index (NDXE) and added up the cumulative volume of all 100 component stocks.  The results look promising (see attached chart).  Instead of weighting each stock's volume according to its market cap, I weighted each stock's volume indicator by its price.  I reset each stock's weight to 1% on the 3rd Friday in Mar, Jun, Sept, & Dec as the NDXE is reset also.  As with my other volume indicators I don't use each stock's daily volume directly instead I use each stock's daily volume divided by its 30-day average volume.  That helps eliminate the influence of the heavily traded stocks (i.e. large caps).
 
The attached volume index with several exceptions has a good track record in calling market turns.  If the indicator is to be believed it shows that selling volume dried up from Jan 8 to the market bottom on Jan 22.  As it stands the indicator looks quite bullish.  The one fly in the ointment is that volume was down today in most of the major indexes.  That usually is not a good sign and that is reflected in today's volume indicator.  To me it looks like the market is treading water awaiting the Fed's decision.
 
 
Pete

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