As readers know, the NYSE TICK is i of my favorite marketplace set measures, every bit it gauges upticking versus downticking on a moment-to-moment footing across all NYSE stocks. A piece ago, I decided to process upticks as well as downticks every bit split upwards fourth dimension serial as well as practise distinct measures of buying as well as selling pressure. What I institute was eye-opening: every bit intermediate-term marketplace set cycles top out, nosotros encounter a distinct withdrawal of buying pressure level from the market, every bit good every bit diminished selling pressure. As the marketplace set tops out, selling pressure level exceeds buying pressure, eventually resulting inwards pregnant selling extremes at or virtually bike lows. Interestingly, buying pressure level picks upwards into as well as next those lows, every bit value-oriented, longer-timeframe participants are attracted to the lower portion prices. (All raw information from e-Signal).
What we’re seeing at introduce is a pregnant reduction of buying pressure level inwards recent sessions (top chart) as well as too diminished selling pressure level (second chart), simply selling pressure level starting fourth dimension to overtake buying (third chart). As book as well as realized volatility stimulate got been collapsing, buyers stimulate got withdrawn from the marketplace set relative to sellers. This is occurring fifty-fifty every bit many wide marketplace set averages are at novel highs, simply the unwrap of shares registering fresh novel highs has been good below belatedly 2014 levels (bottom chart; raw information from the Barchart site.)
All of this looks to a greater extent than similar a topping marketplace set rather than i gaining buying involvement as well as expanding its breadth. We need to encounter a resurgence of buying pressure level to sustain the breakout from the belatedly 2014 trading range.
Further Reading: Who Has the Upper Hand inwards the Market?