Monday, October 12, 2009

Using NYSE TICK to Gauge Institutional Participation

We tend to get very high or very low NYSE TICK readings when buy and sell programs cause baskets of stocks to uptick or downtick simultaneously. In today's trade, we've seen a truncated range in TICK, with very few readings above +800 or below -800. That tells us that institutional participants are relatively absent from the market, which is confirmed by the fact that volume has been running less than half the norm for this time of day. Recognizing the relative absence of large traders has been helpful in anticipating a truncated trading range for the first part of the morning.