ARMS index
- Thread starter Babak
- Start date
from thestreet.com :
Alan Newman, editor of H.D. Brous & Co.'s CrossCurrents, noted the 21-day Arms Index "typically acts as a terrific buy signal" when it rises to 1.20 or above. But since Jan. 1 it has been above that level 49.6% of the time, "yet stocks cannot seem to rally very far, if at all," Newman observed. "We're not about to pin our hopes on the extreme high [Arms Index] readings to buttress any case for the bull. For the time being, the picture clearly continues to fortify the bear case."
Alan Newman, editor of H.D. Brous & Co.'s CrossCurrents, noted the 21-day Arms Index "typically acts as a terrific buy signal" when it rises to 1.20 or above. But since Jan. 1 it has been above that level 49.6% of the time, "yet stocks cannot seem to rally very far, if at all," Newman observed. "We're not about to pin our hopes on the extreme high [Arms Index] readings to buttress any case for the bull. For the time being, the picture clearly continues to fortify the bear case."
this index used to work right, when most peoples weren't into technical analysis. Now that there are/is attention given to the pair between the Tick/Trin, and other components to the ARMS index, as well as the tremendous amount of scalpers profiting/losing on flat/neutral (including .04 gainers) trades, it virtually cancels out the signals given from this trending index.
It used to be that at/below .40 in the DJIA would signifiy tremendous buying soon to come, and at/below .28 meant that it was imminent. Conversely, readings above 1.00 and higher meant huge selling. Timothy Ord still does a lot of pivotal analysis on these indicators and their trending significance.
Factor in the huge market/technical-indicator changing buy/sell programs, and the ability to project a trend more than 5 minutes into the present is almost impossible.
So, what do we use to replace it with?
It used to be that at/below .40 in the DJIA would signifiy tremendous buying soon to come, and at/below .28 meant that it was imminent. Conversely, readings above 1.00 and higher meant huge selling. Timothy Ord still does a lot of pivotal analysis on these indicators and their trending significance.
Factor in the huge market/technical-indicator changing buy/sell programs, and the ability to project a trend more than 5 minutes into the present is almost impossible.
So, what do we use to replace it with?
all technical indicators work.....SOME of the time......you just have to find the ones that work at the time you want to use them 
...... now that the VIX and TRIN etc have become widely mentioned in the media it means that their useful ness is over.....for the time being ..but don't forget them - they'll be back.
Alternatively you cud through it all in the bin, and get your ruler out and your volume charts out and make some real money.
...... now that the VIX and TRIN etc have become widely mentioned in the media it means that their useful ness is over.....for the time being ..but don't forget them - they'll be back.
Alternatively you cud through it all in the bin, and get your ruler out and your volume charts out and make some real money.
I don't think its just because they are widely mentioned. It is more serious than that, the variables have changed:
http://www.hdbrous.com/chartweek.asp?SUBNAV=10
http://www.hdbrous.com/chartweek.asp?SUBNAV=10
If the TICK/TRIN is less useful now because the components have changed, then what about the NASDAQ based equivalents? Shouldn't these be more relevant to trading NASDAQ stocks and indices anyway? For that matter, what about the NASDAQ oriented VIX equivalents (QQV/VXN)?