Tick volatility is a measure of the volatility of the Tick symbol that represents the number of net issues on the NYSE that are upticking or downticking. A high reading means that stocks are simultaneously going higher then lower intra-minute and a low meaning means they’re roughly all in line with each other (or doing nothing).  Tick volatility normally follows the same daily pattern, where it starts out elevated, then drifts lower through lunch, then becomes extremely high into the close.  So far, it has followed that pattern today, except that it has drift to as low as 61, when normally it doesn’t get below 200.  When Tick volatility rises after a sustained trend or consolidation, it often signals a trend reversal in price or a break from consolidation.  As we have never observed Tick volatility readings this low before, with data going back one year (and it could be a data issue, though we don’t think so), we can only throw out as a possibility that a rise in Tick volatility will give rise to a more dramatic price movement.  However, we believe the warning is warranted.

Readers can track Tick volatility by using the standard volatility indicator available on most platforms using a 14 period lookback on a 1 minute Tick chart.

We’re consolidating below the daily gap/pivot area, so are still bearish, but would lower stops to breakeven on any remaining shorts from the 938-939 level.