Decision Point Intermediate-Term Volume Momentum Oscillator (ITVM)
Compared to the shorter-term McClellan Volume Oscillator, the ITVM provides a distinct perspective on volumeCarl Swenl created the Intermediate
Term Volume Momentum Oscillator (ITVM) to provide a fresh viewpoint on volume that is comparable to the ITBM (IT Breadth Momentum) Oscillator on breadth.
Calculating ITVM
Using a ratio of advancing volume to declining volume rather than advances and declines, the McClellan Volume Oscillator, from which the ITVM is generated, is computed in the same manner as the McClellan Advance-Decline Oscillator. In particular, divide the result by the NYSE Total Volume after deducting the NYSE Declining Volume from the Advancing Volume. Next, to work with whole numbers, multiply that value by 1000:
(Total Vol / (Adv Vol – Decl Vol) * 1000)
The remaining computations are the same as for the McClellan Oscillator and ITBM: compute a 20-day EMA by adding the daily McClellan Volume Oscillator (Ratio-Adjusted) to the daily 10% exponential average (Ratio-Adjusted).
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Interpreting ITVM
The ITVM is a barometer of volume. The market’s level of overboughtness or oversoldness is indicated by the absolute value. The most crucial factor is direction since it shows whether the market is strengthening (rising) or contracting (falling). The ITBM is in the best position when it is rising above its 10-EMA, and it is in the worst position when it is falling below it. If the ITBM tops below both the zero line and its 10-EMA, it is very bearish.
Intermediate-Term Volume Momentum Oscillator (ITVM
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The Bottom Line
In contrast to the shorter-term McClellan Volume Oscillator, the ITVM is an intermediate term indicator that provides a distinct viewpoint on breadth. Additionally, it can be used to alert chartists to the seriousness of negative McClellan Volume Oscillator readings.
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