It's all about the ticks!

We had another very bullish session last night as indicated by the internals. Cumulative ticks finished at close to +100,000 again. This is the third reading of +100,000 in 4 trading days and is a very rare occurrence. To put this reading into perspective most trading days sees cumulative tick readings of between +/- 50,000. (For those wanting to understand what the tick indicator is see here). The cumulative tick indicator that I'm talking about is just a running total of the 1minute instantaneous tick readings which I get from Rennie Yang of Market Tells who is one of the quant subscriptions that I use. It's a great and valuable service by the way and I think all traders should check it out (there are loads of charts and other indicators that you won't get anywhere else). Other internals also finished in very bullish territory with breadth coming in at 80% & 70% for NYSE and Nasdaq respectively and A/D lines were +1800 and +1500 for both exchanges. Volume was close to the 30 day median average but below the big volume on Thursday (SPY).

So where to from here? Well 1125 on the ES seems like the next logical place where the bears might reload (area of resistance). I'm still seeing a fair few active bearish signals from my quant subscriptions but for the short term at least I'm bullish and even for the intermediate term I think you have to favor the bulls judging from the recent tape action. I mentioned before that this week was likely to be an important one for the market and any failure to bounce would be detrimental for the longer term. As it was the market passed with flying colours. So while I think some question marks still remain for the longer term (there is probably a good chance that there will be some future shocks) but for now I think the market wants to move higher. Volatility skews have flattened a fair bit so that implies that the market is pricing in less tail risk.