$VOLD Divergence Indicator for ThinkorSwim



Here is an indicator that shows divergences between $VOLD and $SPY. A divergence happen when the price disagree with an indicator or an index. In this case, it's the $VOLD index. VOLD is the difference between the up volume and down volume on the NYSE.

I learned about this concept from a day trader on Twitter (check him out @pierhk).

How to trade:

  • When the price of SPY is going up while $VOLD is heading lower, we have a bearish divergence = short
  • When the price of SPY is going down while $VOLD is heading higher, we have a bullish divergence = long
You don't need an indicator for this, just create a side-by-side chart in ThinkorSwim and have both tickers on display. Or you can use the following indicator and only need to have one chart. Pick whichever works best for you.

I put this indicator together so that I can quickly check for divergences all in one chart.

Here's how it works:

The direction of the candles is based on $SPY. The color of the candles is based on $VOLD. If you see SPY moving down, but the candles remains green, then there is a possible bullish divergence. Same goes for when SPY is moving up, but the candles are red, there is a potential bearish divergence.

This method is just one way of utilizing the market internals to trade. I heard some people also use $ADD and $TICK. Here's a quick overview of Market Internals.

thinkScript Code

This is a repost from our private Warehouse forums. This post is provided to our general members who wish to purchase the indicator as a single product.
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Active member
@BenTen Would you please include the URL of the thread in the study's header. Just makes it easier to go back to it if needed. Thank you.