Quote from Spooz Top:
agreed completely.........once upon a time the TRIN was a valuable piece of info for the daytrader at extreme readings.....almost as good as gold but has been a useless indicator since i can rememeber.
i don`t see the VIX being valuable for an intraday setup whatsoever...........2 to 3 day swing is another story.
To put things in perspective, my office did some research on both Trin and Vix some 5 years ago. I am retired now, but was managing a private fund at the time. We did the research because a colleague suggested that his approach (using Vix) was still viable, and we wanted to get to the bottom line. I knew a couple of folks in the business who believed that the Trin was not as useful as it used to be, because of changes in the makeup of the NYSE. We did the research and found no edge as regards using Trin for short term holds (less than 2 hours)..
For Gaps, we found that what mattered was how soon the market tested the midpoint between previous day's closing bar high, and next day's opening bar low. The problem with using indicators like Tick, Trin, Vix, right at the open, is that the market opens by rotation, and until all the rotations are completed, the display for these indicators is distorted. Also there is the issue of the makeup of the NYSE (Lowery's published comments relating to this a long while back)...now composed of a lot more "holding" companies. For that reason alone, it was thought that the Trin was of very little use.
For me, this is old news. As mentioned in my previous comments, there are several other ways to approach gaps, none of which require Vix, Trin, or Indices, and certainly nothing to do with the Banking Index..
Good luck in the markets tomorrow folks.
Steve
