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This is rather strange. Actually that may be putting it too mildly. The Nasdaq Composite has been incredibly strong, rising +95% from the March 2009 lows and leaving other indexes like the S&P 500 in its dust. So you would imagine that the Nasdaq TICK would be showing underlying strength, just like the advance decline numbers.
But the Nasdaq daily TICK, which measures the aggregate tick movement in Nasdaq stocks, has been scraping the bottom of the chart. Click to see a larger version of the charts:
As you can see from the long term chart above, usually when the moving average of the Nasdaq TICK falls to zero, the index finds its footing. But for some strange reason, during the recent bear market things went haywire. While the Nasdaq fell, the TICK actually rose. And since the summer of 2009 it has been falling. Today it finds itself the lowest it has been for a decade.
We saw something similar in the 2002 bear market where the TICK rose while the market index fell. But very quickly things got back to “normal”. This time around they haven’t (at least yet). I’m not sure exactly why this is because every other market internal metric is painting a very clear picture of strength.
It paints a very different picture. The moving average of the NYSE daily TICK is close to a peak. But the reason why I choose to use the Nasdaq TICK is that the NYSE has a lot of non-operating company securities which invariably pollute the TICK data. When I get to the bottom of this I’ll let you know. In the meantime, if anyone has any ideas, drop me a comment below.
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