Trin On Daily Chart

[soylent]

Carlton --

No one knows the answer to your question -- or, if they do, they'd never tell.

But one things is for sure: There will be other rallys.

-c

[cpatte7372]

Soylent,

Thanks for the feedback. I guess I'm just a little pee'd off at the possiblility of missing the rally we're likely to experience over the coming weeks/months - especially as I've had 4 months of a situation where the market has been in a crappy trading range...

Carlton

[cpatte7372]

Hello Duane,

Sometime ago you kindly provided me with a link to an interesting way to describe the Arms Index, TRIN.

Recently, I calculated the Trin for myself for the S&P500 on April 8th. I counted 426 declining issues and 65 advancing issues. This means losers topped winners by a margin of almost 7 to 1 (an A/D issues ratio of 0.15). Based on volume readings, sentiment was not as strongly negative – here, losers beat winners by a margin of 5 to 1 (an A/D volume ratio of 0.21). The index declined steadily throughout the entire session and reached a session low toward the end of trading. The divergence between the A/D issues and A/D volume ratios indicates that advancing stocks were more actively traded than those that declined. The average volume traded per advancing stock was 4.2 M; the average volume traded per declining stock amounted to only 3.0 M. The session’s data reveals that market breadth was strongly negative on this day.

Now, with all of the above in mind, the description in the link suggests the following:

In a bear market, a TRIN value below 1 is also considered bullish because an unexpectedly low amount of volume is flowing into declining issues (i.e., down-volume is small relative to the ratio of up/down number of issues). If TRIN is declining in a bear market, a bullish signal is given because it shows that volume flowing into declining issues is drying up.

I'm a little confused. In one analysis we're saying that we have a bearish sentiment and in another analysis (based on the same information) we could say we a have bullish sentiment.

Can I get your opinion (or indeed the comments from anyone) on how you would interpret the data.

The TRIN for S&P500 for April 8th was 0.74. Advancing volume was 270M, declining volume was 1,262M.

Cheers

Carlton