The Hourly Market Index and Volume Changes Give Hints Near Turning Points

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The Hourly Market Index and Volume Changes Give Hints Near Turning Points

At sensitive potential turning points, an active market operator can watch hour-by-hour market index price changes and hourly NYSE volume as compared with volume the same hour the prior day.

A good time to watch hourly volume figures is during the first attempted rally following the initial decline off the market peak. You should be able to see if volume is dull and dries up on the rally. Plus you can recognize the first hour that the rally starts to fade, with volume picking up on the downside.

Another valuable period to observe hourly volume data is when the market averages reach an important prior low point and start breaking that support area. What you want to determine is the degree of pickup in selling that occurs as the market is collapsing into new low ground.

Does the hourly volume pick up dramatically or only a small amount? After a few days of undercutting of previous lows on only mildly increased volume, do you get one or two days of increased volume without further downside price progress? If so, you may be in a shakeout area ready for an upturn. This occurred on April 23 and 24, 1990.

Some institutional trading departments or technical chart rooms plot the market averages and volume on an hourly basis every day.