ES Thursday 7-24-2014 : Hot Topic

$TICK and $ADD

Some notes

At the time of writing this (15 July 2004) there were approximately 2,800 stocks being traded on the NYSE.

$TICK

$TICK measures the net last up/down ticks on all the stocks on the NYSE. Once the market has opened, each stocks will be assigned a value of +1, 0 or -1 for the purposes of calculating $TICK. +1 if the last traded price was above the previous traded price, 0 for no change and -1 if the last traded price was below the previous traded price.

The summation of these values gives the value of $TICK at any point in time. See below for extreme and normal values.

The NYSE TICK ($TICK) is a tool used primarily by market technicians to gauge the buying and selling pressure on the New York Stock Exchange [NYSE].

There are three main ways to use this tool:

  • to measure the buying or selling pressure at the close of trading
  • to gauge the strength of a market advance or decline over time
  • and as an indicator of overall levels of bullish and bearish sentiment

$ADD

$ADD measures the net advancing stocks. It is measured as advancing stock - declining stocks.

Some observations

$TICK and $ADD measure the 2,800 traded stocks on the NYSE. This means that either indicator can have a maximum value +2,800 and a minimum value of -2,800. This values are theoretical values and I don't believe have ever actually been seen but I stand to be corrected on this.

Maximum values for $TICK are usually in the +1,000 to +1,200 and -1,000 to -1,200 area with 1,500 and -1,500 considered extremes.

$ADD has extremes that are generally at +2,000 and -2,000 but higher and lower values are also seen.

Because $ADD and $TICK measure the entire portfolio of stocks traded on the NYSE and the S&P500 measures the 500 largest stocks we must be careful when using these indicators as leaders for movements in the ES.