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Summary
MarketSmith Stocks Up on Volume Catches Our Attention
We wrote about MarketSmith and Leaderboard on Saturday, explaining how we “Monitor 52-Week Highs and Breakout Lists” to gauge market strength. This workflow is designed to maintain a cumulative reading on stocks making new highs, stocks gapping up on volume and stocks rising on above-average volume.
MarketSmith Stocks Up on Volume
The MarketSmith splash page is one of the first things displayed when opening the platform. We monitor these values. Lately, the ratio between “Stocks Up on Volume” vs. “Stocks Down on Volume” flipped massively to the “upside.” We saw this rise markedly on Monday, with 319 stocks up on higher volume.
Clicking on the list displays all 319 stocks, which can be sorted in various ways. My favorite is “RS Rank” which sorts the stocks with the highest relative strength versus the S&P 500. We usually check the top 10 on the list. In addition, note the “Volume % Change Column.” Click to enlarge.
If the ratio is rising, we have one of several indicators that support a bullish bias. Flip that ratio around for a bearish confirmation. Last week the ratio was mostly bullish, while the indices faded. More stocks were making new highs. Few of these breakouts pulled back into their bases, telling us we were likely seeing sector rotation, not a top in the market short-term.
We’re trading many of the stocks on the “Stocks Up on Volume” list. AMD HD GNRC LSTR TLRY
Most of the stocks on the “Stocks Up on Volume” list look like AMD. Therefore, with the indices fading, we would anticipate the relative strength in these stocks will continue to keep the market afloat for now. We are looking for a bounce.
In addition, the NYHL indicator, which compares the stocks on the NYSE making fresh 52-week highs with the number making fresh 52-week lows is above the zero line. It’s been above since the first week of July. This is another bullish indicator.
NYAD Advance Decline line is rising as well.
Keep an eye on New 52-Week Highs and Stocks Up on Volume this week.
We’ll do the same during the LIVESTREAM Broadcast. See you at 9:20 AM. Watch, Listen and Trade during market hours (9:20 AM ~ 4:15 PM EST).
Happy Trading,
Vinny
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