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The most important trading tool
"The Tick Index"
 

Definition of the "tick Index" 

 
The "Tick Index" is the difference between the number of issues (or stocks) trading with the last trade higher (an uptick) form the previous price and issues (or stocks) trading with the last trade lower (a downtick) for the previous price.

For example, at any given time, lets say there are 2000 stocks trading on the N.Y.S.E.. Of the 2000 stocks traded, 1200 are traded up 1/8 from the previous price (an uptick) and 800 stocks traded down 1/8 from the previous price (a downtick).
 

What is the "tick index reading"? 

 
1200 traded on an uptick - 800 traded on a downtick = 1200 - 800 = +400 tick index reading.
The "Tick Index" readings is what I use to determine turning points in the market.
  

 The "Tick Index" buy signal 

 
To define a buy signal using the N.Y.S.E. tick index and candlestick charting, I have found down-tick readings that exceed -900 and that coincide with a bullish candlestick pattern appear near short term bottoms. A formula I use to signal a short term buy is that I look for two days in which at least one of the two days has at least a down-tick extreme reading exceeding -900 intraday. The second most extreme down-tick reading day should be near 70% reading of the first. At least one of the two days extreme down-tick reading days must exceed -900 (preferably higher). The time frame from the first extreme down-tick reading day to the second extreme down-tick reading day should not exceed five business days. These conditions produce a buy signal.