The institutional buying and selling chart called the TICK lets us intelligently speculate on what institutional traders are doing. Institutional trading is highly secure and is a very guarded secret among institutional trading firms. The best amateur traders can do is to speculate on what institutional traders might be doing.
Trading volume normally will spike if large institutions place a big order. Along with the stock price’s change, you can make some guesses. For instance, if trading volume spikes relative to the stock’s average volume at the moment when the stock price also goes up, that may mean large investors are buying. Alternatively, if you notice a stock’s volume increase and the stock price drops, you might guess institutions are selling.
The drawback of this method is that volume can be impacted by external variables, like options expiration, short selling and window dressing.
Continue reading “Institutional Buying and Selling Chart Called the TICK”
China’s deal to buy the Chicago Exchange has been delayed by the SEC. Hallelujah, the SEC does have some commonsense after all. Reuters reports (link above) that a long-term objective of China is to list Chinese companies in the United States through CHX, which has locations in Chicago and New Jersey.
China Buying Chicago Stock Exchange Is a Bad Idea
China buying the Chicago Stock Exchange is a bad idea IMO. China is a communist country and as such they don’t abide by the same transparency that U.S. listed companies do. Why does this matter?
The Chinese have manipulated their currency and business markets for their own maximum advantage at the expense of US workers. Chinese money bought corrupt politicians that caused the collapse of the entire manufacturing sector in the US. That’s not the behavior of a friend or “most favored nation”. In fact, I think the evidence suggests that China is more an enemy of the US than it is a friend.
Currency manipulation and a push to outgrow America has led to fake Ghost Cities across China.
Much of China’s debt is not secured and so many Chinese companies borrowed money with fake collateral and so where does that leave investors if the company goes bankrupt?
Moody’s recently downgraded China’s debt and how do the Chinese respond? With contempt and anger rather than admission of the problem inherent to all communist systems.
Stock exchanges have listing requirements. Violate the listing requirements and your stock gets booted from being listed on that exchange. If China buys the Chicago Stock Exchange and then lists Chinese stocks on that exchange, that’s a huge conflict of interest! Of course China will change the Chicago Stock Exchange listing requirements to favor its stocks. It will be the China Stock Exchange as a market inside the US economy and it will lack transparency because Chinese companies lack transparency. What about the Chinese companies that claimed to have collateral to bail out investors in case of a bankruptcy? No worries, the Chicago Stock Exchange won’t have any requirement of Chinese companies to secure collateral.
Not only should the SEC reject China from buying the Chicago Stock Exchange, but every China ADR that’s listed on US markets should be reviewed by the SEC and possibly delisted if they lied on their books and fail to prove they have collateral for their debts. China companies must provide the same transparency that US companies do and the Chinese government has to be willing to prosecute businesses inside China on behalf of the SEC. That’s fair trading for US investors and US companies IMO.