Thursday, February 04, 2010

What We Can Learn From Extreme NYSE TICK Readings

Through 13:00 CT, I calculated the number of NYSE TICK readings that exceeded +800 and the number that were lower than -800.

For 800 stocks to uptick or downtick simultaneously, we need to see buy or sell programs executing.

The total number of +800 or -800 readings thus gives us a clue as to the relative activity of those programs.

So far today, as of 13:00 CT, we had zero readings above +800 and 61 readings (out of 270 minutes of trade) below -800.

Lots of program activity. Selling.

If we're to rally, we'll need to see significant positive readings to tell us that these lower prices are attracting institutional interest. In the absence of such signals, the bounces in TICK have represented opportunities to enter on the sell side.