Well the NCI support held all day. And then, what the hell do you call that - a shuttle launch?!? I've never seen my TICK chart crowded with so much green in such a short period of time. Too bad I got stopped out 5 minutes before blastoff...
NCI just bumped up against resistance from Thursday's high. But the SP500 equivalent resistance is .44% higher.
Sorry I haven't updated this thread for a while, but it's not like everyone has been breaking down the door to get at my thoughts or to add their own. So for you lurkers I'll wrap up with a preliminary conclusion based on a couple of weeks of study. I have now looked at three types of trades, utilizing the NYSE TICK, RSI's and a couple of other supplementary indicators. The three time-spans were daytrades of 3 hours plus duration, daytrades of 1 to 2 hours, and daytrades of a couple of minutes to an hour duration. My trading vehicles were DIA and SPY. My indicator vehicles were the Dow 30, DIA, SPY, SP500 and the NYSE Composite Index (NCI). I also looked at the futures equivalents, but not in detail, as I do not trade them. And I also briefly investigated the IWM because of its higher range trade possibilities - I will be looking at it closely in the future. For my two styles of all-in-ramp-out trading and all-in-all-out-at-target trading for the shortest strategy, I can conclude that using my indicators and plotting support and resistance on the NCI produces the most profitable and least risky trades. It is not even a subtle difference. Plotting trades based on the Dow 30, DIA and SPY produced vastly inferior results to the SP500 and NCI. And the NCI even appreciably bettered the SP500 index. Based on these conclusions I would recommend anyone trading any of the index ETF's or futures to do their own investigations into the most efficient use of your trading indicators and support/resistance determinations. Hope this little study will spur you on to more profitable trading...
As an after thought let me share why I think the NCI produced the best results. If one looks at a single stock as representative of the whole NYSE stock market one can very well expect anomalies between that one stock and the whole market. Add another stock and those anomalies are likely to decrease. Make it 500 stocks and those anomalies will be drastically reduced. With a basket of 2,000 NYSE stocks it just seems logical that the NCI will more accurately represent the true sentiment of the whole NYSE market. This is because no matter how many or how severe the anomalies are they will all eventually gravitate back to the overall market sentiment. The NCI is less likely to produce anomalies to take out stops and more likely to faithfully reproduce the true support and resistance levels. One thing I noticed with tight stops is that they might get hit based on the traded ETF or even the SP500, whereas based on the NCI they may not, thus preserving a trade that otherwise might get prematurely stopped out. The same is true for support/resistance profit-taking levels. Besides the reality of what I have discovered in my little study (based on my limited parameters), to me the results are eminently intuitive as well.