Info!! Tracking Existent Fourth Dimension Marketplace Reckon Through Purchase In Addition To Sell Programs

In past posts I've mentioned that I rail a handbasket of institutional favorite stocks too monitor upticking too downticking across the grouping every infinitesimal of the trading day.  The logic is that when large marketplace position participants desire to purchase or sell with urgency, they volition elevator offers or hitting bids across a hit of liquid stocks.  This simultaneous upticking or downticking across a hit of shares--the execution of purchase programs too sell programs--leaves a footprint that provides a really useful catch of instantaneous marketplace position sentiment.

The top nautical chart tracks sell programs on a rolling one-day Blue Planet from October, 2014 to the present.  Note the expansion of sell programs at relative marketplace position lows too the diminished degree of sell programs at relative marketplace position highs.  That is pretty much what nosotros would await to see.

When nosotros become to the 2d chart, tracking purchase programs, nosotros run across the same pattern, however.  At relative marketplace position lows, nosotros run across to a greater extent than buying activity.  At relative highs, buying dries up.  This is really important.  What makes marketplace position lows is that lower prices attract longer timeframe buyers--the ones who execute inwards baskets.  Volume ramps upwards at relative marketplace position lows because 1 grouping of participants is actively selling too around other grouping is actively scooping upwards the shares instantly offered on sale.  At relative marketplace position highs, zip is on sale too longer fourth dimension frame participants are non incentivized to buy.  Total mass dries up.

It is the 3rd chart, tracking the relative residuum betwixt buying too selling programs, that tells us who is winning the tug-of-war.  At marketplace position lows, sell programs diminish spell purchase programs proceed to fire.  That creates a province of affairs inwards which buying pressure level spikes early on inwards a marketplace position cycle.  (Note that this is what has happened lately inwards the wake of the ECB action).  As a marketplace position rising matures, sell programs get to transcend purchase programs too nosotros run across the residuum betwixt the ii top out ahead of price.  The recent pregnant expansion of programme buying suggests that nosotros should run across upside momentum from recent cardinal banking concern actions.

I included the fourth, bottom nautical chart to brand a split upwards point.  Notice inwards the 3rd nautical chart how nosotros had intensive selling pressure level alongside the institutional favorite shares prior to the recent marketplace position rise.  Despite that, the cumulative NYSE TICK (the amount of upticks vs. downticks across all NYSE shares) stayed potent too instantly has made novel highs.  What that way is that nosotros were seeing intense selling (downticking) alongside the liquid large cap issues, precisely non across the wide market.  It was that discrepancy that ready the recent strength.

I deeply appreciate the involvement readers convey shown inwards the move I convey shared.  These are proprietary measures (all information from e-Signal too all calculation too charting done inwards Excel), precisely I volition update periodically to remain on top of where nosotros stand upwards inwards marketplace position cycles.  I volition likewise hold upwards sharing information most the breadth too stance measures I rail inwards my upcoming book. 

Further Reading:  A Look Back on a Previous Instance of Program Buying Surge
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