Monday, March 03, 2008

A Daytrading Pattern With the NYSE TICK

As long-time readers know, one of the market indications I follow is the distribution of the NYSE TICK as that unfolds during the day. This morning provided a particularly good illustration of a short-term pattern that I find especially useful: a series of rising bottoms in the TICK, suggesting that selling pressure is drying up over time. Once we see price moving to relative highs from one TICK peak to the next, those successive drops in the TICK become nice entry points on the long side. The price lows at recent TICK bottoms also provide a natural stop loss point for the quick daytrade.