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Volume Momentum Oscillator (ITVM) was developed to give us a new
perspective of volume similar to
that offered by the ITBM (IT Breadth Momentum) Oscillator
It is derived from the McClellan Volume
Oscillator which is calculated the same as the McClellan Advance-Decline
Oscillator, except we begin with a ratio of Advancing Volume to Declining
Volume instead of Advances and Declines. Specifically we subtract NYSE
Declining Volume from Advancing Volume, then divide the result by NYSE Total
Volume. We next multiply that result by 1000 so we are working with
((Adv Vol - Decl Vol) / Total Vol) * 1000.
The rest of the calculations are the same as
for the McClellan Oscillator and ITBM.
The ITVM is a new indicator and we do not currently
have historical charts for it.
The ITVM is a barometer of volume. The absolute
value indicates how overbought/oversold the market is. Direction is most important
because it indicates whether the market is getting stronger (rising) or weaker
(falling). The best condition is for the ITBM to be rising above its 10-EMA, and
the worst is falling below its 10-EMA. It is extremely negative if the ITBM tops
below its 10-EMA and below the zero line.