Thursday, July 30, 2009

NYSE TICK: A Look at Buying Sentiment in an Uptrending Market

One characteristic of trend days to the upside is that the NYSE TICK--the number of NYSE issues trading on upticks minus those trading on downticks--will persistently stay above zero, with many readings greater than +800. That shows that institutions--those that trade the baskets of stocks that will tick up or down in unison--are leaning strongly to the buy side. We see that so far in today's market, as we've yet to get a single TICK reading < -500.

In an uptrend day, the pullbacks in TICK to negative territory tend to be short lived and can be excellent short-term buying opportunities. Also in uptrend days, the moving average of TICK (green line) will tend to stay above zero (blue horizontal line) throughout the day.

Here is more on the topic of identifying trend days to the upside.