Skip to main content
Track Trailing stop
5 / 36
Search the archiveLibrary
Library

1992issue C121-7

Tick-index extremes as continuation and turn hypotheses

An extreme tick-index print can support continuation or a turn, depending on where the close sits, whether the candlestick real body is compressed, and whether a trailing stop is already live. This case walks the stated market-breadth rules through December 1991 and April 1992 Standard & Poor's futures sessions.

  • The tick index is a market-breadth count of issues last trading on an uptick minus those last trading on a downtick, and an extreme print is only a proposed cue.
  • A close near the day's high or low with an intraday extreme above 600 is a continuation cue, while a narrow open-to-close span with the same extreme is a turn hypothesis.
  • When a session meets both a breakaway confirmation and a turn warning, the archive workflow tightens the protective stop and follows the next session's direction.
  • A later high can print without a tick-index flag, which is why a trailing stop stays attached after held-gain sessions.
Entries in this reading3 entries
Current trackTrailing stop87 readingsCandlestick patterns100 readingsMarket breadth120 readings

What the tick index counts

The tick index is defined as issues last trading on an uptick minus issues last trading on a downtick. A session with 500 upticks and 250 downticks produces a reading of 250. That net count is a market-breadth snapshot of how many issues are printing higher versus lower on the latest trade.

An intraday-extreme is a reading beyond a stated threshold during the session, used as a proposed turn or continuation cue. The closing-tick is the same count at the session close, read separately from any extreme printed earlier in the day.

Double extremes and four operational rules

A documented double-extreme setup treats two intraday readings of 600 or more downticks at roughly the same Dow Jones Industrial Average price, at least one day and no more than 10 days apart, as a buy condition at a double bottom. The mirrored pattern of 600 or more upticks is the sell condition at a double top.

Four operational rules were stated. An intraday tick extreme above 600 plus a close near the day's high or low is a continuation cue. A narrow-range-session, meaning a day whose open and close sit close together, plus ticks above 600 is a likely turn. A closing-tick above 600 is a near-term turn warning. Breakaway sessions from highs or lows usually printing above 500 are treated as reversal confirmation, a breakaway-print that direction has changed.

The December 1991 sequence

In the December 1991 June Standard & Poor's futures sequence, a 670 downtick session was treated as an intraday buy under the narrow-range-plus-extreme-tick rule. The next session gapped up with 860 upticks and a compressed open-close range. That created a rule-conflict between breakaway confirmation and a turn warning. The archive workflow handled the conflict by tightening protective stops and following the next day's direction.

Later December 1991 sessions were read as continuation when price advanced freely on still-elevated upticks: more than 10 points on 610 upticks, then a five-point gain on only 620 upticks. The tape was then read as a stalling top when a close of 660 upticks was followed by a 1-1/2-point open-close range with a 796 closing uptick print.

NYSE tick extremes through the December 1991 June S&P rally

Signed tick-index prints the article cites for June S&P sessions from the 19 December 1991 low through the 31 December stall. The −670 downtick at the low is the buy-side extreme; later sessions stay at or through +600 even as the close compresses, which is the source’s top warning. Values come from the stated session readings in the text, not from tracing the candlestick plate.
Signed tick-index prints the article cites for June S&P sessions from the 19 December 1991 low through the 31 December stall. The −670 downtick at the low is the buy-side extreme; later sessions stay at or through +600 even as the close compresses, which is the source’s top warning. Values come from the stated session readings in the text, not from tracing the candlestick plate.June S&P 500 futures, NYSE tick index · daily session · 1991-12-19T00:00:00.000Z to 1991-12-31T00:00:00.000Z

Each primary point is the tick reading named for that session (intraday extreme unless only a close is given). The 30 December 660-uptick close is the rally the source places between the 27 December (F) and 31 December (H) letters. The ±600 lines are the extremes used in the four operational rules.

The April 1992 low and a silent high

The April 8, 1992 low printed 1,000 downticks with a fairly narrow open-to-close range and was treated as a reversal under the narrow-range rule. The next session's 750 upticks and eight-point close that held its gain was not treated as an impending top.

After further April sessions that held gains on 920 and then 1,000 upticks, the tick-index rules did not flag the subsequent high. A stop at the prior day's low would have exited on April 16 as the contract began to decline. The case cites that miss as the reason trailing stops stay attached to positions: a protective exit is raised or tightened after a signal or a held-gain session so a failed hypothesis has a predefined bound.

Candlestick body and shadows

The accompanying candlestick notes define the real body as the open-to-close span and the shadows as the high and low extensions. The body is unfilled when the close is above the open and filled when the close is below the open. The same open-high-low-close bar is usable from an intraday to a monthly scale.

Editorial: the compressed real body is the second layer of the three-layer check, because a narrow-range-session is a small open-to-close rectangle sitting under an extreme tick print. The first layer is where that close sits in the day's range. The third layer is the trailing stop that stays live when a rule-conflict appears or when the breadth tape never prints a flag at the high.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
5 of 36 in the Trailing stop track
19931-7 pp.Next on Trailing stopConstructing layered stops from equity and structureThe initial-stop is decided before entry and placed at fill, with position size set so stop distance stays inside a chosen equity-fraction-risk.
All readings on this track · 36 readings
  1. 1988Half-day bars, a midpoint gate, and a bar-based trail
  2. 1989Packaging two-bar reversals into testable entry and exit rules
  3. 1989Weekly high and low averages as stop-and-reverse levels
  4. 1991Constant false-alarm rate for dominant-cycle stops
  5. 1992Tick-index extremes as continuation and turn hypotheses
  6. 1993Constructing layered stops from equity and structure
  7. 1993Filter crossovers with moving-average slope
  8. 1993Precommit stop bounds from equity and structure
  9. 1998Evaluating a trendline barrier that can only tighten a capped stop
  10. 1999Constructing common-number support and resistance
  11. 2001Four-step opening-hour bias and trailing stops
  12. 2004Make the trading system the star
  13. 2005A beginner stock case: stop, trail, and the pre-trade checklist
  14. 2006Sell stops that trail support after the buy
  15. 2006Treat a wave-3 label as unfunded until the stop rails are written
  16. 2008Test medium-term divergence with a trendline break and a trailing stop
  17. 2010Rule-based forex entry, stop and trail
  18. 2012Precommitting stops when one currency range templates another
  19. 2012Cat-ears as a downtrend continuation hypothesis
  20. 2013Three-average swing entry and a trailing average exit
  21. 2014Construct a dual quotient-copy trend filter under a frequency roof
  22. 2014Stop distance, size, and trailing swing invalidation
  23. 2014Long-only RSI pullback, reversal-bar-entry, and staged-trail construction
  24. 2015Dual-average regime, trigger candle, and trail as one daily script
  25. 2015Three-gate trend system: filter, trigger, and trailing stop
  26. 2016Construct HHLLS crossover and breakout entry rules
  27. 2017An appointment-trade around a scheduled political close
  28. 2017Golden-cross breakout rules for a swing entry
  29. 2017Breakout confirmation above round numbers, with nines as sell shelves
  30. 2018Classify diamond geometry before the breakout
  31. 2019When trails and stops betray the support read
  32. 2019One-triggers-the-other pairs for preplanned swing entries
  33. 2019One-triggers-the-other orders for a breakout and its stop
  34. 2019When the second decision unbounds planned risk
  35. 2020Last-Hour Breakout With a Same-Session Flatten
  36. 2020Couple the slow period to stop-loss and trailing-stop settings
By fieldMarket breadth101 readingsBy year1992115 readings
All 87 readings tagged Trailing stop
Also on Trailing stop5 readings
1989Packaging two-bar reversals into testable entry and exit rules1994Constructing polarized fractal efficiency as a path filter1995NYSE tick extremes and candlestick reversal entriesCandlestick patterns1986The stop, the size, and the acceptable loss as one pre-entry gate1988Half-day bars, a midpoint gate, and a bar-based trail