Anemic Volume Today

It's no surprise that today was a range bound trading day with little opportunity, unless you were trading something that was stock specific like CSCO. Volume was well below average for most stocks and indexes. Here's how I track intra-day volume in order to get a clue as to it being a trend day or a range day, which is important to identify so that you have realistic expectations for follow through on trades.

I keep an excel spread sheet that I update daily. This spread sheet tracks the average for the prior 20 trading day's average volume, range and 14 period ATR (average true range) for each 15 minute period of the trading day on the S&P 500 index etf (SPY). Okay, that was a mouthful. This spreadsheet is useful because I can look at it and tell what the average volume for the prior 20 days on SPY between 10:00 and 10:15. For example, today's volume for that period was roughly 2.5 million shares. By itself that doesn't mean much to some people. Well, my spread sheet tells me that the average for that 15 minute period (10:00-10:15) for the past 20 trading days is 6.8 million. It doesn't take a market wizard to figure out that today's volume for that period was way below average.

I print this sheet out in the morning and leave blanks to hand write the SPY volumes for that trading day. This method works better than just a moving average on the volume below the chart because it compares apples to apples (or the same period of time to the same prior periods). Here's a screen shot of today's sheet:Maybe we'll see a little more follow through tomorrow..this chop can really put a dent in the P&L if you're not careful. The chop got me a little but fortunately I was catch some of the CSCO move this afternoon to put me in the green for the day.

Hope you all had a good start to the trading week.

TLT