Tuesday, February 16, 2010

Midday Briefing for February 16th: Watching VWAPs

At this juncture in the day, 30 of the 40 stocks that I follow in my basket (five stocks from each of the eight S&P sectors that I track regularly) are trading above their volume-weighted average prices. We're also seeing positive Cumulative TICK on the day and a positive Cumulative Delta. In a trending market, we should sustain a sizable plurality of stocks above or below VWAP and positively sloped Cumulative TICK and Delta. Very often, a narrowing of the difference between the prices of stocks and their VWAPs will point the way toward a general market move back toward its VWAP--particularly if we're seeing similar erosion in TICK and Delta readings.