The upside trend day typically begins with significant strength. One tell, which Market Tells has noted and backtested, is a high level of NYSE TICK early in the session. Related to that is breadth strength in the market early in the day's trade. Above you can see a chart of the intraday advance/decline ratio for the Standard and Poor's 500 stocks for today's market. (Chart from Sierra Chart). Note that the ratio started at over 7.0 in the first five minutes of trading and, after an early dip that still left the ratio high, expanded even further to over 9.0. In other words, practically everything in the SPX universe was going up. That was a great sign that sellers were just not in the market.
But here's another worthwhile tell below:
So what does that tell us? The big caps were strong and getting stronger and the small caps were strong and getting stronger. Nothing was weak! That tells us we can literally be in dip buying mode all day and make money. Or we can buy early weakness and hold through the afternoon. Or we can hold a piece of a position through the day and buy dips with added pieces along the way.
And, yes, the NYSE TICK was positive through the day and the TICK specific to the Russell stocks was positive as well. Quite simply, when we get *broad* strength on any time frame that is a favorable condition for upside momentum. On the day time frame that creates trend days--and great opportunities for riding momentum for profits. This is a great example of the principle that edges in markets come from looking at information that others are not looking at and seeing it in ways that others can't perceive.
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