CTA Volume Analysis & Market Breadth 3

Question 1

What is 'distribution' in the context of volume and market structure?

Accepted Answer

Heavy volume on declining days suggesting institutional selling into rallies

Answer

An even spread of volume across all price levels

Answer

A breakout pattern with rising volume

Answer

The distribution of stocks across sectors

Question 2

Chaikin Money Flow (CMF) primarily measures:

Accepted Answer

The volume-weighted average of buying and selling pressure over a set period

Answer

The direction of price momentum over 14 days

Answer

The ratio of a stock's volume to its sector average

Answer

The difference between daily high and low prices

Question 3

What does a 'volume dry-up' near a support level suggest?

Accepted Answer

Sellers are becoming exhausted and a bounce or consolidation may follow

Answer

Imminent breakdown below support

Answer

A confirmation of the downtrend

Answer

Increased short-selling activity

Question 4

In market breadth analysis, what does a 'bearish breadth divergence' mean?

Accepted Answer

The market index achieves new highs while the A/D Line fails to confirm by making lower highs

Answer

The A/D Line makes new highs along with the index

Answer

Volume expands on up days across all sectors

Answer

Small-cap stocks outperform large-caps

Question 5

The 'volume-price trend (VPT)' indicator differs from OBV in that it:

Accepted Answer

Multiplies the percentage price change by volume rather than using the full day's volume

Answer

Uses only closing prices without volume

Answer

Is calculated weekly rather than daily

Answer

Measures breadth instead of volume

Question 6

In technical analysis, what is meant by 'confirming volume'?

Accepted Answer

Volume that supports and validates a price breakout or trend by being above average in the direction of the move

Answer

Volume that equals exactly the 50-day average

Answer

Any volume reading above 1 million shares

Answer

Volume that matches the prior day's level