The OBV (On-balanced volume) plot with respect to Dow indicates very strong accumulation of stocks in the New York Stock Exchange. In fact the accumulation has started since Dow's intermediate low in November 2008. OBV was very strong before the March 2009 sell-off. There was clear divergence between Dow and OBV in January 2009, they moved in opposite directions, Dow moved down whereas OBV moved up. On March 9 even though Dow has set a new low but the OBV was at about the same level as the November 2008's low. In the last 10 days Dow has been moving side-way whereas the OBV has consistantly moving upwards indicating strong accumulation. If the saying, "volume preceeds price" is true, I would expect the Dow to break out and move upwards in the same direction as OBV after the current consolidation phase.
The OBV (On-balanced volume) plot with respect to Dow indicates very strong accumulation of stocks in the New York Stock Exchange. In fact the accumulation has started since Dow's intermediate low in November 2008. OBV was very strong before the March 2009 sell-off. There was clear divergence between Dow and OBV in January 2009, they moved in opposite directions, Dow moved down whereas OBV moved up. On March 9 even though Dow has set a new low but the OBV was at about the same level as the November 2008's low. In the last 10 days Dow has been moving side-way whereas the OBV has consistantly moving upwards indicating strong accumulation. If the saying, "volume preceeds price" is true, I would expect the Dow to break out and move upwards in the same direction as OBV after the current consolidation phase.
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