Wednesday, September 16, 2009

Catching Shifts in Intraday Market Sentiment

One of the things we want to look at when the market pulls back from highs or bounces higher from lows is the degree of participation generated by the countertrend move.

Here we see one-minute NYSE TICK values for the day thus far, with the zero line highlighted with the purple horizontal line.

Note how the pullback early in the morning session could never generate negative TICK levels approaching the significant -800 level. Conversely, the bounce off those lows easily produced multiple +800 or greater readings.

That told us that, once again, buyers were using weakness to aggressively purchase stocks. Catching those shifts is key to reading intraday market sentiment.