NYSE Tick Index and Candlesticks by Tim Ord
The tick index may appear to be one of the simplest of market indicators, but it also offers insight into market psychology. As a stand-alone indicator, the tick index has its place in the technician's toolbox, but combining the tick index with candlestick charting, another technical method for spotting changes in market trends, creates a potent combination.
A wealth of information waits to be discovered in the New York Stock Exchange (NYSE) tick index. Its strong suit is its simple calculation. At any point, this index represents the number of stocks trading on an uptick minus the number of stocks trading on a downtick. Extreme tick readings of greater than +600 may indicate temporary exhaustion of buying power, while negative tick readings in the territory of 800 or more can point to a selling climax.
I use these readings throughout the day as an indicator for buy and sell decisions, as well as for recognizing the continuation of the prevailing trend. The tick index is broadcast throughout the day from most real-time data vendors, including the stock market tape that can be seen on the bottom of the screen during CNBC's day-time broadcast. The tick index can be enhanced by using technical price pattern recognition, specifically candlestick charts. Although I have used numerous other technical studies, combining the NYSE tick index and candlestick charting creates a reliable indicator for signaling turning points in the stock market.