Watch the TICK

Watch the TICK. The tick refers to the price change of an investment. If, for example, IBM is at 80.00 and moves to 85.00, the stock is on an uptick. The tick index ($TICK) helps the trader know best when program trading is overly influencing the market. Program trading is over 57.9% of the trading of the NYSE (Dow Jones Newswires, Dec. 16, 2005, page C9). If more than half of the total trading on the NYSE is program trading, it helps explain why the market sometimes experiences sharp, sudden intraday swings and why large institutional investors often have the power to move the market. The TICK Index can be either + or -. Typically is runs -900 to +1100. When TICK increases, upticks are outnumbering downticks. If so, buying pressure is increasing and the bulls are in control. When the bears are leading, or gaining control, the tick index is falling, and selling pressure is increasing. Pay little attention when $TICK is +400 or -400, but begin watching + or – 600 as it leads to + or -800. As the TICKS increase to +1200 or -1200, institutional traders are aggressively in the market; the goal is to trade on the same side as the institutions….and know when the large buy/sell orders hit the stock market.