Prem, Tick, Trin, Vix, Etc.

The TRIN can be deceiving on the opening because obviously not all stocks open at the same time, and the TRIN is basically a "snap-shot" of the Most Active List on the NYSE.

A stock can be down an eighth, but influence the TRIN in a very negative manner because it is trading HUGE volume.
 
GG:

There were quite a few threads in the Spring where some detail was shared about these various indicators...I mentioned in that thread that the essence of each of these indicators(TRIN, TICK, TIKI) changes as time goes by and with the different biases in the markets(BULL vs BEAR)...I still stand by that since I have been using these indicators since 1998...

I mentioned that I felt that TIKI has lost some of its edge because of the increase in program trading and the number of times TIKI will hit its upper or lower bounds in a succession, thereby eliminating the edge of reversals, if it continues to surge up or down...Also, a smaller fact that sometimes is omitted, but the various data vendors seem to report different TIKI readings, so your 24 might be my 18, it kind of throws it all off track, imo...
 
Originally posted by AAAintheBeltway
These are basic to trading the futures. Watch the TICK and TRIN and it will be obvious to you how to use them. The "spoos" is the S&P futures or ES futures. It often leads the cash, but can itself be influenced by action in big stocks like MSFT. Don is talking about program trading. If the value of the S&P futures deviates too much from the cash index, ie the PREM gets too big or small, then program traders will arb out the discrepancy. This will show up as spikes on the TICK. If the PREM is at the level where programs can trigger, it is very dangerous to be on the opposite side. For example, if the PREM is too high, you might think that is a good place to short the futures but you could run into a buy program that will cause the market to ramp.
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Just a modification in thinking. We always use the PREM to see if we want to enter a trade. Just seeing how it relates to SPOT (SPX), will tell us if we have a better chance at that particular entry point.....with or without it (PREM) being near a "program trading" trigger point. Keeping in mind the constant relationship between Futures and Spot prices.

Don
 
Originally posted by vulture
GG:

There were quite a few threads in the Spring where some detail was shared about these various indicators...I mentioned in that thread that the essence of each of these indicators(TRIN, TICK, TIKI) changes as time goes by and with the different biases in the markets(BULL vs BEAR)...I still stand by that since I have been using these indicators since 1998...

I mentioned that I felt that TIKI has lost some of its edge because of the increase in program trading and the number of times TIKI will hit its upper or lower bounds in a succession, thereby eliminating the edge of reversals, if it continues to surge up or down...Also, a smaller fact that sometimes is omitted, but the various data vendors seem to report different TIKI readings, so your 24 might be my 18, it kind of throws it all off track, imo...
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I agree with both the point that the way to use these indicators can change over time and also, that different quote vendors report very different numbers. It's scary to compare them side by side. It's not just TIKI, but virtually everything. Don't use a system that depends on these numbers unless you have tested it with the actual vendor you will be using to trade.
 
Originally posted by Don Bright


Just a modification in thinking. We always use the PREM to see if we want to enter a trade. Just seeing how it relates to SPOT (SPX), will tell us if we have a better chance at that particular entry point.....with or without it (PREM) being near a "program trading" trigger point. Keeping in mind the constant relationship between Futures and Spot prices.

Don
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Don,

I know you have a lot of experience using these and have mentioned before that you use them this way. Wonder if you could explain it a bit more? What are you looking for exactly to tell you if you will have a better chance? Also, now that rates are so low, FV and the program trigger levels have gotten very low. Does this affect you at all?
 
I'm looking forward to hearing more detailed info from Don Bright concerning FV and Prem.....
I would like to add a little more detailed info that I have learned from Toni Turner in her book..."a beginner's guide to day trading online", pages 145-149 explain in very simple detail how she and others in her previous trading office used trin and tick for more profitable trading.
I will paraphrase.....for more detail, get her book..........it is definitely worth the money and time involved to read and apply her methods.
TICK, TRIN and S&P futures give the facts on the Market Internals. BTW, tick and trin apply to Nas and listed stocks...they have their own symbols for the market you're trading depending on your feed. TICK is a short term trading indicator. Generally, when it's up big and POSITIVE, that is a BULLISH indicator. When TICK is MOVING UP, say from -345, up, up ,up to -235, and continues into POSITIVE territory....say to +115 and continues to +200 and so on, this is an indicator that you have a rally taking place, if it starts heading down, be on the alert. You have to watch this for awhile to get a feel for it.....Conversely, if the TICK is heading LOWER, especially in Negative territory, say -150,
-250,-260, etc. this is a bearish indicator. (I am trying to make this explanation as simple as possible).
The TICK shows the number of stocks ticking up minus the number of stocks trading down. (If the TICK reads +297, that means 297 more stocks are ticking up than are ticking down. A number over 0 is positive, or bullish. And the reverse is true, if the TICK is reading -489, that states that 489 more stocks are ticking down than up, which is a bearish indicator.
 
During the day, if the TICK stays fairly consistently in positive territory, most strong stocks for that day will usually keep their upward momentum.
HOWEVER, when the tick is galloping towards 1000, watch out, that could be a signal that the market is extremely OVERBOUGHT, so prepare, just in case there is a reversal.
Also, remember these indicators are used for intra day trades or scalps for the most part.
On a very negative day, (BEARISH), when, OR if the TICK slides to -1000, or lower, be aware for a POSSIBLE reversal. This is an indication of an extremely oversold market situation.
It may be helpful to follow a basket of stocks for awhile to see which ones follow the S&P and the Tick and Trin.
Toni Turner has a "TICK" rule, (as indicated in her book)...for scalps and daytrades , no entries on the long side if the TICK falls below "0". So, negative tick, no trade on the long side...now please keep in mind, these are short term indicators to be used with discretion as an aid in making a decision as to when and if to enter a trade. THERE is no guarantee in trading. These indicators are helpful aids and guides. Keep it simple and understand what the indicator is indicating before you use it for real money trades. Try it out for 2-3 weeks beforehand, to see if these indicators can give you more of a "trading edge".
Also, remember the short side. If the tick is positive for the most part, no shorting stocks. When the TICK is positive, over 0, then that is a bullish indicator. When the TICK is negative, under 0......or a minus number, be prepared to go short. Watch and learn for yourselves. REMEMBER, when the TICK is a positive number this is a BULLISH indicator. When the TICK is a negative number, this is a BEARISH indicator. And I will add a big USUALLY!
I need a break, I will give a little more info on TRIN as a short term indicator in a little while.
Remember, I am trying to keep this information as simple and basic as possible. Later...:)
 
What is best time frame for tick chart ?

I use 1 minute ticks.
I have found in non-trending market that a move of 200 points in the tick ( 1 minute )signal a good chance of trend reversal.

A move of 300 pts. ( 1 Minute) signals extremely good chance of trend reversal.

Is there something I could add to this ?

(confirmations from trin, prem. ect )

I have not had a lot of success in strong trending market using tick's as a trend reversal.
A move to =+1000-1200 leads to pullback and resumption of trend in most cases.

I use SPY 3 minute for market, would I have much advantage
using Mini Sp's in lieu of SPY, I noticed they track almost identical,
as I compare intra day charts.
My question is do they change faster than the SPY's ?
 
Originally posted by Gordon Gekko
...-nitro once said to me that i should write down the value of spoos on my entries. where would i get the value of spoos?
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GG,

Not just the value of the spoos, but the value of PREM. See Don's posts to understand why.

It is not a bad idea to write down all the values that influenced your trade when you made it, or sometimes there is no "value."

How about:

I have been watching AOL the whole day, and out 50K shows up on the offer. Normally, 50K in AOL is nothing to write home about - something that you might have noticed and wrote in your journal somewhere else. But this time, I see the bids begin to disappear and the offer step down with the bids. Since I have access to bullets, I am gonna whack the bid and help the seller down.

Groovy, I got a .30c profit - but all of a sudden, I see a "clean up print" in AOL for 500K - and I have already seen 2M shares go by in blocks of 50K, etc. Whoa, I am now up .75c, but I see buyers come in. I am covering and going LONG!!

Cool, the seller seems to be gone, and the stock is being bid up furiously, and I got another .40c to show for it. Wait a minute, there is another 50K on the offer. Hmmm, not panicing yet, I will keep and eye on the "pace" of the buying. Wham, the 50K is lifted and we are going higher! Glad I didn't bail. Hmmh, there is a 75K offer - now the pace is definetly getting soft. I am getting out and looking to get in again - which way I have no idea. It could be long, or it could be short - I'll just wait for the tape to tell me...

nitro
 
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