What makes the VWAP% helpful is that it is a real-time measure of breadth at an intraday level. In a trend day, we'll see the vast majority of shares either trading above or below their weighted average prices and stay at those elevated levels. In a range day, where we're likely to see sector rotation, we'll see more modest levels of VWAP% and often an oscillation above and below the 50% mark, as the above chart depicts.
I get my VWAP% data from e-Signal. One can also construct VWAP% for Dow stocks only and for NASDAQ shares to get a sense for how large caps and tech-related shares are trading. It's a nice way to stay on the right side of the market: at a glance you can see if we're trading in a way that is trending and directional versus mixed and rangebound.
Further Reading: Six Ways to Identify Trend Days in Stocks
Posts
