Internal Indicators Bullish Prior to Close May 11

May 11, 2009: 2:18 PM CST

I wanted to get this post up quickly to highlight something interesting I’m seeing in the Market Internals for May 11th in the S&P 500 (SPY).  So far on this rangebound day (following a gap-down), the Market Internals (particularly TICK and Breadth) have been biased to the upside.

Click for larger image.

After the gap-down, the day has been remarkably rangebound for the day.  However, there’s possibly a little ‘bulllishness’ built into the market internals.

First, the TICK has spent more time above the Zero-Line than below it.  Also, we have three absolute TICK readings of or near 1,000 and only one (spike down in the morning) reading near -900.

Second, the Breadth (or the Net Advancers on the Day Minus the Net Decliners on the Day) has been inching its way positive all day, as more stocks are rolling back positive than negative… although on the whole, the Breadth is still negative (1,200 more stocks were negative than positive at the time of this chart, though pay close attention to the direction of breadth through the day).

I’m not saying the day will zip back to the upside, but it’s definitely something to keep your eye on, or at least to be aware if you’re bias is to the short-side this afternoon.

Corey Rosenbloom, CMT

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9 Comments

9 Responses to “Internal Indicators Bullish Prior to Close May 11”

  1. roy Says:

    How did you create the breadth indicator?

  2. meques Says:

    i dont know why here is the difference between your tick chart and mine, that i take from quote.com
    So, if on my chart we can see bullish divergence near 12-13 EST as i see on your chart there is no divergence. strange thing. btw, probably anybody know some another online web site which provide online nyse tick chart?

  3. Corey Rosenbloom, CMT Says:

    Meques,

    I heard Linda Raschke discussing this point at one of her online seminars, but the main idea is that different vendors use different values for TICK. For example, some might use all NYSE stocks, others might eliminate some of the stagnant stocks, etc but that the TICK – unlike breadth or TRIN – was not an exchange-generated indicator (in other words, not the same for everyone).

    I've noticed differences across programs as well (Linda noted differences from her CQG and TradeStation) so that could be a reason for slight variations across TICK reading. Some people even create their own TICK indicator like Dr. Brett Steenbarger. You can create your own aggregate basket of stocks to look at and create a TICK indicator through the day.

  4. Corey Rosenbloom, CMT Says:

    Roy,

    Using TradeStation, I place $ADV in graph 1 and $DEC in graph 2, make them both invisible, then put SPY in graph 3, TICK in graph 4, and use the indicator “Spread Diff” in graph 5. The indicator takes the difference of “Data 1 and Data 2” which creates a mock Breadth index. Otherwise, just scale $ADV and $DECL on the same grid/chart (scale) and note the differential.

    As you can tell from today's end-of-day action, no indicator, not even breadth, is perfect as we got an end-of-day sell-off instead of stabilization or a rally.

  5. tgarfield Says:

    They put MS. Doom on CNBC.

  6. panepon Says:

    I really want to say thank you for your nice advise every day.
    Especially today's one is good for me.
    This is from Tokyo, Japan

  7. meques Says:

    thnks for explanation

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