No Buyers on a bounce

[Pascal]

It is not the first time that I note this sort of RT divergence.


Pascal

[sesorensen]

It is not the first time that I note this sort of RT divergence.


Pascal

Attachment 13216

Hi Pascal, Maybe you could explain the influence that TICK NYSE Index has on the EV-price divergence, if any? It appears that the TICK (not cumulative) often is surfing in positive territory (0-1000) during the divergence (price increase while EV remains flat). Thx sorensen

[Pascal]

Hi Pascal, Maybe you could explain the influence that TICK NYSE Index has on the EV-price divergence, if any? It appears that the TICK (not cumulative) often is surfing in positive territory (0-1000) during the divergence (price increase while EV remains flat). Thx sorensen

The cumulative tick is a trace of HFT machines that accumulate/sell on a very broad base. If you see the price going up on a flat MF but a positive tick, it means that machines are moving the price up, but that large investors are not participating. Does this mean that large investors are right? My hypothesis is that they are, because they have the "connections" at the right place, because they also operate "HFT" machines when necessary and because they need to keep their position for sometime, while HFT machines would/might unwind positions by the EOD.

This means that a position that is going up intraday on light MF would have chances to reverse down by EOD because HFT machines will need to come back to neutral, except if there is continuous funny money being pushed into the markets. I believe that would be detected by large players who would also buy and the MF pattern would be up.


Pascal