Monday, August 17, 2009

NYSE TICK and Aligning Trading With Intraday Sentiment

In the prior post, I suggested that it is premature to count on a market reversal in a weak market until you see evidence of significant buying interest.

The NYSE TICK is a useful measure of such interest, because it captures the moment-to-moment trading of all stocks on the New York Stock Exchange: whether they are transacting on upticks or downticks.

As we can see above, the TICK has spent the majority of its time below the blue zero line, with a number of readings below -800. Conversely, we've yet to see a positive reading of +800 or greater.

I like to track a short-term moving average of TICK (H-L-C for each period) to see if that average is spending more time above or below the zero line. So far today, we have been below the line throughout the morning. That is typical of trend days to the downside, another reason that has me careful trying to pick market bottoms.