What is the Closing Tick
The closing tick is the difference between the number of stocks that closed higher than their previous trade, i.e. that closed on an uptick, and the number of stocks whose closing prices were lower than their previous trade that closed on a downtick. A closing tick is used by traders as a technical indicator, expressed in numerical value, to denote strength or weakness in the broad market. Since buying at the close generally indicates market strength, a sustained series of positive closing ticks indicates bullishness, while a series of negative closing ticks indicates bearishness. The most widely watched closing tick is that of the New York Stock Exchange, known as the NYSE.
BREAKING DOWN Closing Tick
Closing ticks can be considered positive or negative. If more trades, also known as ticks, closed at a higher value than they were initially sold for, the closing tick is thought of as positive. If more ticks held a lower value at the close of the market than they were previously bought or traded for, the closing tick is thought to be negative. Ticks that are sold near the closing of the market are often referred to selling at the close while stocks that have been advanced at the close are known as buying at the close.
Just as the closing price of a security is of more importance to traders than its intra-day prices, the closing tick is more important than intra-day ticks because it indicates where the market closed on a given day. The closing tick is a general indicator for the health of the market in that if the overall closing tick is positive, the market can also be thought of as positive. The closing tick can let investors, traders and consumers have a baseline for strategizing when the market opens the following day or as a measure indicator for how well their strategies worked the previous day in order to reevaluate.
The Wall Street Journal often publishes a Markets Diary: Closing Snapshots, which lists a comprehensive overview of stock statistics, including closing ticks, issues traded, advances, declines, unchanged stocks and total volume.
Example of a Closing Tick
As an example of what a closing tick would look like, if the difference between stock’s closing on an uptick on the NYSE and those closing on a downtick on the NYSE is 500, then the NYSE's closing tick would be 500.