11/12/2025 – The one edge I’ve discovered to be most constant in short-term buying and selling is utilizing value, quantity, and high-frequency information (see under) to determine when patrons have been aggressive however can’t push the market to new, relative highs and when sellers have been aggressive and can’t push the market to contemporary, relative lows. The query that’s value asking on this context is: “Who’s trapped?”. It is the protecting of positions, mixed with the motion of momentum/development merchants, that creates large strikes and market reversals.
This happens on all time scales, and it happens throughout completely different shares and sectors. A promising buying and selling method is to display screen shares based mostly upon the diploma to which merchants have been lively in a single path and might not maintain the development. Once we see this occurring throughout shares and sectors and particularly throughout time frames, we frequently have a fantastic reversal alternative out there.
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* When the amplitude of the TICK measure will increase (increased highs/decrease lows), we see a broadening of participation by the institutional gamers that commerce whole baskets of shares. Once we see lowering amplitude, there may be decreased participation within the accompanying transfer. That always happens as strikes exhaust themselves.
* When the assorted TICK measures differ considerably, it implies that completely different elements of the general market are attracting shopping for/promoting. This sometimes happens as a part of rotational markets.
* TICK lows that can’t make contemporary value lows are likely to happen in uptrends and might provide good short-term entries. The identical is true of TICK highs that can’t result in contemporary value highs.
Adjustments within the distribution of the TICK measures; modifications of their distributions relative to 1 one other; and modifications of their means to maneuver value are essential short-term tells for merchants.
The essential issues in markets happen inside the bars you are watching on charts.
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11/10/2025 – Such an essential inform: When the market strikes increased or decrease, do extra or fewer shares take part within the move–especially when the market is already overbought or oversold? It is under no circumstances uncommon for topping markets to show fewer new highs regardless of rising costs and fewer new lows regardless of falling costs. Final week’s value motion relative to breadth was a fantastic instance of this and has led to the market power late Friday and within the premarket. This identical precept applies to international macro markets: When one fairness index is making new highs, however others are lagging, that may be a very completely different international progress story than a state of affairs the place every little thing is transferring increased in live performance (and vice versa). How markets transfer let you know who’s doing the moving–and understanding that’s the finest path to a clear-headed psychology.
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11/9/2025 – A lot of merchants have requested me recently why they’re struggling of their buying and selling. When many merchants are struggling, there is a good likelihood that they have not developed psychological points with their buying and selling suddenly. Somewhat, one thing in markets has modified and they’re struggling to adapt.
For the reason that finish of October, the SPX has dropped virtually 2%. Throughout that very same time, the share of shares above their 20-day transferring averages has risen meaningfully for vitality shares, monetary shares, healthcare shares, actual property shares, and utilities shares. In different phrases, there was sector rotation away from the strongest names and into the elements of the market that had been underperforming. Simply take a look at the final 5 buying and selling days in XLK (know-how) and XLC (communications), for instance, in contrast with the previous week in XLE (vitality) and XLF (financials). Airline shares throughout this era of airport turmoil? They’re up on the week.
There’s a vital lesson right here. When your buying and selling efficiency declines, you’ll want to do the identical factor that you just do when your automobile engine begins making loud noises. You look below the hood. One thing has modified and must be addressed. The market story is going on throughout a number of charts and a number of time frames. Turning into locked specifically charts, time frames, and views is a failure to adapt.
The perfect merchants at all times method the market with contemporary eyes and sometimes that results in contemporary concepts and trades.
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11/7/2025 – The most important market contributors are very involved with worth. When a inventory or different asset strikes increased or decrease on elevated quantity, it is usually a transparent signal that establishments are revaluing that asset. The merchants I work with spend a great deal of time scanning information and speaking with knowledgeable contributors to see if the rising story might need legs. The place the start dealer would possibly get down as a result of they “missed” the transfer, the knowledgeable dealer acknowledges {that a} breakout in quantity and volatility that takes us to a brand new value degree may very well be the beginning of alternative. That is significantly the case when the transfer on elevated quantity is going on in a particular sector ETF, equivalent to client discretionary shares (XLY). Such strikes typically flag sector rotation amongst giant cash managers. Hardly ever is such rotation a one-and-done phenomenon. When establishments have interaction in a broad rotation, it is a signal that they are seeing power in a single a part of the financial system and weak spot in different elements. An oversold sector that doesn’t present subsequent shopping for curiosity is telling a narrative. A sector that strikes increased on elevated quantity and barely corrects can also be telling a narrative. As in chess, we succeed by coming into the mindset of these we’re taking part in in opposition to. We do not wish to turn into so centered on our personal psychology that we miss what’s taking place on the chess board.