Most active STOCKS
by Arthur Merrill
The 15 most active issues on the New York Stock Exchange (NYSE) are listed daily in The New York
Times and The Wall Street Journal, and weekly in Barron's. Are these statistics helpful?
The average price statistic can be used to measure the speculative tone of the market. A market
dominated by low-priced stocks is speculative; one dominated by high-priced stocks is usually
respectable. Because the market becomes speculative at the top of a swing, low values of this indicator
should be found at market peaks.
I use the weekly statistic reported in Barron's and correct it for price level by dividing by the NYSE
composite average. I then smooth the data by a 33% exponential moving average (approximately
equivalent to a 5-week simple moving average).
How well has it performed? Figure 1 presents the past five years. Price gradually deterioration in 1985
and early 1986, then maintained a steady, low level through 1986 before further deterioration. The lowest
points were April and August 1987, giving warning of speculation before the October 1987 crash. There
are signs of speculation in 1988 and 1989, which are not encouraging.