Although the marketplace ultimately decides price direction, specialists and market makers constantly use their inside knowledge to trigger volume and profit their own accounts. Specialists have the little black book that shows the location and size of all stop orders. Market makers have a similar advantage with Level III. In the absence of more pressing market conditions, insiders will always push price in the direction they expect the most volume or one that will set up their own accounts for the most gain.

A quiet neutral, neutral-negative bid/ask or high volume, high negative bid/ask can both provide favorable trading environments for the short-term trader ready to go long. In neutral markets, cash waits for opportunity and price can jump quickly when it appears. And wide, highly negative bid/ask spreads in very active markets often signal a short-term bottom and offer quick bounce profits.

Serious traders also watch tick, breadth and index to predict the impact of the ticker tape. Use these measures to locate convergence-divergence with individual price action. For example, index movement provides highly accurate prediction on short-term direction for many individual stocks. Use them to filter entries during corrections and to locate key reversal zones. Avoid long positions when an underlying index violates key support, even when the tape is improving.
 

Tale of the Tape: Even with the tremendous variety of available information, watching price pulses on time and sales remains the single most accurate method for short-term price prediction. The emotions of fear and greed reveal themselves more clearly in this rapid pulse than in any other reading of the ticker tape