Tuesday, January 22, 2008

NYSE TICK and Intraday Trending

Note the distribution of the NYSE TICK through the morning per the above. We see higher highs and lower lows, suggesting more stocks being accumulated at the market offer; fewer transacted at the market bid. That tells us that sentiment has been steadily improving over that period. Note the blue moving average line (30 min) for the TICK; it shows an uptrend and is a nice, quick visual way of seeing how the TICK distribution is changing over time.

Because the NYSE TICK assesses transactions at offer and bid for all NYSE issues, it tracks buying and selling pressure in the broad market quite well. Above we can see that the Russell futures were particularly responsive to the positive sentiment (TICK lows occur at higher price lows). The fact that the Russell stocks have been outperforming the large caps this morning is also a sentiment indication per my recent post.

Shortly after writing this the market and TICK distribution turned downward, breaking the pattern of higher TICK highs and higher lows. Shifts in the TICK distribution don't catch exact market tops or bottoms, but are useful indications that intraday trends are coming to an end.


Assessing Trend With NYSE TICK

NYSE TICK: Small Caps and Large Caps