Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Has anyone else noticed that the NYSE Tick has really diverged from the ES? Enough to say it's almost totally uncorrelated anymore. I first started noticing this a year ago, and it became extremely prevalent six months ago to now. I use to use it to help judge trend strength with some MA's on it.
Nowadays the Tick is so divergent it can be up-ticking through an entire ES downtrend. As I don't pay much attention to it anymore... I am considering ditching it.
Kinda puzzling though... Going to go check $UVOL and $DVOL and if they are diverging too.
Update: Yep... NYSE Volume ratio's and everything are divergent from the ES too nowadays. Correlation has gone way way down. *Head scratcher.*
Can you help answer these questions from other members on NexusFi?
@MedianVelocity: Markets change, and so do the market's internals; and $TICK values and $TICK behavior changes over time. $ TICK extreme values change over time, depending on the bias of the market and it's attendant volatility. The $TICK is still highly correlated to the ES, as you can see in the below chart. But one must adapt their $TICK strategies to current markets - not past markets. This not only includes taking direction into consideration, but volatility also.
The markets have changed and continue to change for a myriad of reasons, which I have enumerated in my Spoo-nalysis thread, but the why is not so important as the how. How have these changes affected price action and what adjustments to my signals, strategies, and methodology, do I have to make to better anticipate current market realities as opposed to historical realities.
Ok, since your not getting what I am talking about... Here is a chart of today. Notice the tick average staying high all day and only dipping slightly negative twice.
The whole idea of using any kind of correlation in trading is to uncover a predictive relationship that can be exploited. If two variables are perfectly correlated and in lockstep with each other, there is no predictive value, other than the trend may be intact for the moment. If however, they are divergent or lagging then a trading opportunity may present itself. If the market is rallying and the $TICK is rallying, then the market is inherently strong, however, if the market is rallying and $TICK is not , then this implies that "smart" money is selling into the rally. For some reason, the $TICK's predictive value is better for picking swing bottoms, rather than tops.
