11/12/2025 - The one edge I've found to be most consistent in short-term trading is using price, volume, and high-frequency data (see below) to identify when buyers have been aggressive but cannot push the market to new, relative highs and when sellers have been aggressive and cannot push the market to fresh, relative lows. The question that is worth asking in this context is: "Who is trapped?". It's the covering of positions, combined with the action of momentum/trend traders, that creates big moves and market reversals.
This occurs on all time scales, and it occurs across different stocks and sectors. A promising trading approach is to screen stocks based upon the degree to which traders have been active in one direction and can no longer sustain the trend. When we see this occurring across stocks and sectors and especially across time frames, we often have a great reversal opportunity in the market.
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11/11/2025 - The measure of price action and volume that I have found most consistently helpful for short term trading is the NYSE TICK and its cousins, the SPX TICK, the NASDAQ TICK, and the Russell 2000 TICK. (I track these in real time on the Sierra Chart platform). These measures capture, many times in a single minute, how many stocks are trading on upticks versus how many are trading on downticks. Here are a few observations:
* When the amplitude of the TICK measure increases (higher highs/lower lows), we see a broadening of participation by the institutional players that trade entire baskets of shares. When we see decreasing amplitude, there is reduced participation in the accompanying move. That often occurs as moves exhaust themselves.
* When the various TICK measures differ significantly, it means that different parts of the overall market are attracting buying/selling. This typically occurs as part of rotational markets.
* TICK lows that cannot make fresh price lows tend to occur in uptrends and can offer good short-term entries. The same is true of TICK highs that cannot lead to fresh price highs.
Changes in the distribution of the TICK measures; changes in their distributions relative to one another; and changes in their ability to move price are important short-term tells for traders.
The important things in markets occur within the bars you're watching on charts.
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11/10/2025 - Such an important tell: When the market moves higher or lower, do more or fewer stocks participate in the move--especially when the market is already overbought or oversold? It's not at all unusual for topping markets to display fewer new highs despite rising prices and fewer new lows despite falling prices. Last week's price action relative to breadth was a great example of this and has led to the market strength late Friday and in the premarket. This same principle applies to global macro markets: When one equity index is making new highs, but others are lagging, that is a very different global growth story than a situation where everything is moving higher in concert (and vice versa). How markets move tell you who is doing the moving--and understanding that is the best path to a clear-headed psychology.
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11/9/2025 - A number of traders have asked me lately why they are struggling in their trading. When many traders are struggling, there's a good chance that they haven't developed psychological issues with their trading all at once. Rather, something in markets has changed and they are struggling to adapt.
Since the end of October, the SPX has dropped almost 2%. During that same time, the percentage of stocks above their 20-day moving averages has risen meaningfully for energy stocks, financial stocks, healthcare stocks, real estate stocks, and utilities stocks. In other words, there has been sector rotation away from the strongest names and into the parts of the market that had been underperforming. Just look at the last five trading days in XLK (technology) and XLC (communications), for example, compared with the past week in XLE (energy) and XLF (financials). Airline stocks during this period of airport turmoil? They're up on the week.
There's a very important lesson here. When your trading performance declines, you need to do the same thing that you do when your car engine begins making loud noises. You look under the hood. Something has changed and needs to be addressed. The market story is occurring across multiple charts and multiple time frames. Becoming locked in particular charts, time frames, and views is a failure to adapt.
The best traders always approach the market with fresh eyes and often that leads to fresh ideas and trades.
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