this post for calculation of the adjusted TICK). As nosotros plunged to intraday lows on Oct 10th, nosotros made a depression inwards the cumulative TICK line; equally we've directly moved dorsum to those lows, the line has held at much higher levels inwards a dramatic divergence. What gives?
The TICK is a mensurate of stocks trading on upticks versus downticks. It begins its calculations amongst the showtime of trading inwards NY together with ends when the NYSE closes. As a result, the TICK does non line concern human relationship for activity that occurs overnight, betwixt the USA marketplace unopen together with the side past times side day's open.
If nosotros lead maintain a await at the S&P 500 Index (SPY) from the showtime of September, nosotros abide by that the marketplace lost almost 42 SPY points (approximately 420 ES points). From the showtime of September upwards to that Oct tenth inflection betoken at which the position out of stocks making novel lows hitting its highest grade (see chart), SPY lost 3.29 points betwixt the NY unopen together with the side past times side day's opened upwards together with lost 34.8 points betwixt the NY opened upwards together with close. From Oct tenth forward, SPY has lost 8.46 points during overnight merchandise and, during the 24-hour interval session, has genuinely gained 4.8 points.
The cumulative TICK is capturing the fact that buying trace per unit of measurement area has been exceeding selling trace per unit of measurement area during the 24-hour interval trading sessions from Oct tenth to the present. Indeed, during that time, the S&P 500 Index--if nosotros await at 24-hour interval session only-- has risen inwards value. This is a clear shift inwards authorities together with suggests that weakness inwards equity markets from Oct tenth frontwards has shifted to the European together with Asian markets. That weakness prompts the USA marketplace to opened upwards lower, but has non led to farther internet selling initiated inwards the U.S.
This morning, equally of my writing, we're seeing a potential repeat of this same pattern. Markets were real weak inwards Asia, opened quite weak inwards Europe, together with are trading lower inwards preopening trading inwards the USA stock index futures. We made novel comport marketplace lows overnight inwards the ES futures but, equally I write, are trading most 1.5% inwards a higher house those lows. Should nosotros create value during the regular trading 24-hour interval inwards a higher house these lows, I volition hold upwards leaning to the long side inwards my short-term trading, entertaining the hypothesis that, inwards this alter of regime, the 24-hour interval markets inwards the USA lead maintain already seen their cost lows, fifty-fifty equally markets overall (due to overseas/overnight influence) have been weak.
What prompted this petty investigation was a elementary observation that a growing percentage of my intraday trading profits was coming from the long side, despite the overall weak market. That makes sense, given that many of my trades drive to capture swings inwards the NYSE TICK (i.e., essay out to follow short-term buying/selling sentiment). I volition popular off on to follow these swings inwards early on activity today, amongst a detail pump toward whether nosotros sustain a positively or negatively sloped cumulative TICK line on the day. That volition enjoin us whether USA traders during the 24-hour interval session are using overseas/overnight selling for create out hunting, or whether they are succumbing to the global marketplace weakness.
P.S. - On a related note, Cumulative TICK together with Short-Term Sentiment
Trading With the TICK
Trading Breakouts With TICK
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