Saturday, October 11, 2008

The Cumulative NYSE TICK: Selling Sentiment Prevails in the Stock Market

As readers know, I find the NYSE TICK to be one of the most sensitive measures of buying and selling interest on a short time frame. When the TICK is positive, it means that more stocks in the NYSE universe are trading on upticks; when TICK falls negative, it means that more stocks are trading on downticks.

By cumulating the one-minute readings from the NYSE TICK, we can gauge buying and selling interest on a longer time frame. Above we can see that the Cumulative TICK (blue line) has been falling to new lows along with the S&P 500 futures (pink line). Keeping tabs on TICK intraday (whether we have more readings above or below the zero line) has been very useful in avoiding bottom fishing in this market. The Cumulative TICK, like the advance-decline line (which I'll review in Monday's indicator review) has been registering lower highs and lower lows with each market bounce and subsequent decline this week, as lower prices have failed thus far to attract significant buying interest.