Friday, January 15, 2010

Two Things I'm Watching RE: Intraday Sentiment

Note two dynamics in intraday sentiment thus far today:

1) We've traded largely below zero in NYSE TICK (note blue moving average of TICK) throughout the morning, as stocks have persistently traded on downticks vs. upticks. Noticing that (and tracking the themes among USD, currencies, and sectors) was key to seeing that we would break below the important 1137 area support mentioned in the morning briefing;

2) TICK levels have seen progressively higher lows, suggesting a potential drying up of selling pressure over the course of the morning. If that can be followed up with an expansion of buying--and TICK that stays dominantly above zero--we could see significant short covering add to any bounce. We need to start registering TICK values of +800 or greater, however, to suggest that fresh buying, not just short covering, is coming into the market.

The lows from 1/12 and 1/13 represent important support; a break below those would likely bring significant selling interest.