| Answer:
Dear
Mr. Pergamo,
An
excellent question about a commonly used phrase that
most people know very little about.
Various
Types of Ticks...
First,
let's define "tick." A tick represents price
movement of a stock. The word is derived from the
original ticker tapes.
There
are upticks and downticks. An uptick takes
place when a stock trade is executed at a higher price
than the preceding trade in the same stock. An uptick
is sometimes referred to as a plus tick.
A
downtick takes place when the sale of a stock
is at a lower price than the previous trade in the
same stock. A downtick is sometimes referred to as
a minus tick.
The
NYSE Closing Tick...
A
closing tick, on the other hand, is both a
broader term as well as a semi-official short-term
technical indicator. It describes or measures the
number of stocks on the Big Board (the NYSE) that
ended the trading session on an uptick -- that is,
their closing prices are higher than their previous
trade -- minus the number that ended on a downtick
-- that is, those whose closing prices were lower
than their previous trade.
So,
the Big Board's closing tick is either up, if more
stocks upticked or down, if more stocks downticked.
What
You Can Learn From the Closing Tick...
The
closing tick is believed by some to be a predictor
of the market's trend, which makes a certain amount
of sense. An up closing tick clearly means that there
was general buying activity at the close of the day
where as the opposite is true of a down closing tick.
A sustained positive closing tick is generally regarded
as a short-term signal of a strong market. A sustained
minus or down closing tick may indicate a bearish
market.
Finding
the Closing Tick...
The
closing tick for the New York Stock Exchange is reported
daily in the financial press. In the Wall Street
Journal, for example, you'll find it in the "C"
section under "New York Stock Exchange Composite Transactions."
It's actually in a box entitled "NYSE Scorecard."
Within the box, it is under the heading "Diaries."
The
closing tick on the Friday before Labor Day was +150.
On Tuesday after Labor Day, it was +71. The "Journal"
also lists what the closing tick was a year ago --
which on Tuesday was +47.
A
Word About Boldface...
Although
you didn't ask about individual stocks, you might
find it interesting to look at those stocks printed
in boldface in the financial pages. Boldface indicates
that the stock moved 5% or more in price over the
previous day's close.
Good
luck!
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