Quote from demonet:
Two questions:
One: there was some odd price action on the 5 minute chart at bars for 12:55, 13:00 and 13:05, in that there was some selling well below the average trading range of the bar. If one looks at the t&s from these 13:00 for instance, you see a series of trades at 1127 taking place, and then a single trade (or possibly more as I have a >= 10 contract filter on my t&s) of 15 contracts at 1124.25, then immediately afterwards a series of trades at 1127.25, i.e. the trades resume back to the "normal" range of the bar. Price action like this happened in all three aforementioned bars. What is happening here? Who might be selling and why are they selling at so far below bid? Is this a warning I could take note of if I see this again that there might be an agressive sell-off forthcoming?
Two: I think in retrospect, my biggest error today (other than not following my indicators and second-guessing the market b/c I was too getting cocky/greedy!), was too not pay enough attention to Arms/Trin. Clearly for most of the day it was above 1.3 which is pretty bearish. I know the trin is the ratio of advance/decline ratio to the up volume/down volume ratio, but in all honesty, I never was clear on the calculation of this final number.
In attempting to break down the meaing of the trin, it appears that if there are more declining equity issues on higher volume, one would have an overall ratio of a lower number numerator and a higher number denomonator which would be as a result in a lower number overall:
like this:
low advancing issues/high declining issues
-----------------------------------------------------
higher total up volume/lower total down volume
Since it would seem to me that we had higher declining issues on higher volume today, we would have had a lower number, but obviously there was not. What don't I understand here? And if there is positive price action in ES with a very bearish Trin (an equity indicator), what exactly is taking place?
