More Evidence, The NYSE TICK Chart

The TICK chart is the number of advancing issues per tick (1 min) minus the number of declining issues, this is calculated as either up or down from the last tick, it IS NOT calculated on the basis of whether a stock is in the green for the day or red.

If you looked at ES or AAPL alone, you'd think we were seeing a MONSTER afternoon rally, however when looking at the TICK chart, we see max readings of about 1000, this is strong, but no where near as strong as the moves in the last hour or so have "appeared". When I pulled up this chart I was expecting solid +1250 with spikes to the highs of around 1500, instead I see spikes to 100 and a lot of action only at 500, this means there weren't nearly as many stocks participating in this afternoon move as you'd think by looking at the momentum stocks or the popular stocks like AAPL.

Not every stock is going to see a head fake move, usually the more visible a stock is (popular) and the bigger the pattern (resistance or a big triangle like AAPL) the more likely we see a head fake move. With such low participation, it seems the head fake moves were reserved for the stocks that most of the market would be watching on what is typically the slowest day of the week any way.

In other words, I try to trade with the probabilities, I have no problem having opened positions today given the evidence from 3C to price patterns, expectations of market behavior before a reversal, CONTEXT, our risk asset indicators, etc. Like I said earlier, every once in a while we see that "ah-ha!" moment when it all seems to pull together, today looks to be such a day.