Tuesday, February 02, 2010

Midday Briefing for February 2nd: More Bullish Sentiment

For the second day running, NYSE TICK has been skewed toward buyers, lifting the stock market higher. We can see above that the moving average of TICK (blue line) has stayed consistently above the zero line (purple), as stocks are trading dominantly on upticks rather than downticks. Other bullish tells thus far today include our staying above the day's volume-weighted average price (VWAP) following the morning breakout referenced earlier today, the solid lead of advancing over declining stocks, and the bullish themes (strong commodities, strong stock sectors).

I've found it useful to keep a checklist of these factors as a way of identifying which way institutional sentiment is leaning. Such a list makes it easier to step back and think before trading against the market tide.