Thursday, December 17, 2009

Cumulative NYSE TICK Line and Short-Term Market Sentiment

Note how the Cumulative NYSE TICK line (red) has moved steadily lower during the day, breaking to new lows well before we saw fresh price lows for the day in the S&P 500 Index (SPY; blue). Because TICK is based upon the upticking and downticking of stocks in the broad market, the cumulative line gives us a general sense for buying and selling sentiment on the day.

The most recent bounce in SPY has occurred on relatively low TICK levels, suggesting it reflects short-covering more than broad-based buying. Generally, we need to see TICK readings above +800 and below -800 to suggest meaningful intraday institutional sentiment.