Swami Volume shows volume relative to its recent average. Higher relative volume is shown in white and lower volume is shown in blue.
Unlike a traditional volume bar chart, the Swami Volume shows smoothed volume
deviations from recent averages. The net effect of this is to make abrupt
volume changes easier to perceive whether or not the absolute volume is high,
low, or in-between. Swami Volume produces a clear picture of the often
complex relationship where volume often leads major price movements.
In the chart above we see volume drying up as the bullish trend is ending in mid
February (additional buyers in short supply). With no more buyers, a
downward price move begins on low volume and then accelerates (sellers anxious
to get out) in early March. Then in the second week of March most of the
sellers are gone and prices again begin to rise on low volume. Finally at
the beginning of the fourth week in March we see profit taking (volume rising as
a peak is rounded) and we are again beginning a downward move. This time the
selling is less frenetic as indicated by the low volume and orderly price
decline. But somebody knows something as we see the stealth accumulation
occuring just before a big leap in prices near the 1st of May.