Sunday, July 12, 2009

A Look at the Cumulative Adjusted TICK

The Adjusted Cumulative TICK takes each one-minute average TICK value and subtracts from that the 20-day average of previous one-minute values. That tells us in relative terms if more stocks on trading on upticks vs. downticks. The adjusted feature makes the measure sensitive to shifts in momentum--as stocks top or bottom out we'll see less positive or negative TICK values on a relative basis--so that the Adjusted Cumulative TICK should peak and trough ahead of price.

We can see how the Cumulative TICK topped out ahead of price on the market's upmove. Interestingly, the recent move to lows in the S&P 500 futures (red line) have been accompanied by higher lows in the Cumulative TICK. I will be watching this closely to see if this non-confirmation is followed by further signs of indicator strengthening and market bottoming. Thus far, other indicators--such as Technical Strength and new highs/lows--are not showing similar divergences.