I was surprised to find that when I updated my S&P volume indicator to see
that it is showing a negative bias for tomorrow. The volume indicator is
below Friday's close while the S&P is above (see attached).
The volume indicator is comprised of industry volume that is weighted to mimic
the weight of the S&P component stocks. In addition the indicator
reflects the volume of several thousand stocks not just 500. For some
time now I have been attempting to track the market by tracking and combining
the individual component stocks that make up the indexes. Naturally I
first tried the 30 stocks of the DJIA and then the 100 stocks of the OEX.
I abandoned this approach when it became apparent that the price and volume
movements of the large cap stocks that comprise the the major averages are more
random than a typical mid-cap stock. I believe that program trading and
index fund buying/selling is responsible for this element of randomness.