today's TRIN Spikes

F

F. d'Anconia

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At 11:45am today the NYSE trin spiked to 3.80 and on the Nasdaq to 5.09. Both of these are relatively unheard of levels.

My personal theory is that when the S&P broke down to new lows of the year (at the same time), major sell stops were hit and tons of program trading went off. Once this selling was over it was only natural that the markets slowly ground upwards into the close with all bigger sellers done.

anyone care to discuss or offer any opinion?

Mind you, in no way am I calling for some sort of bottom here (I am strictly intraday so I could care less), am just talking about what happened during the day. If I had to bet longer term I think its still down further.
 
Funny thing is when it did hit that level, I was in and out pretty quickly.

I wonder if anyone else had that feeling that it could have gone lower.

In any case, it was the culmination of several days of selling and then finally Kohn's statement. It definitely was not a capitulation.
 
I guess you were not around in 98? vols expoded, they had to close the exhange an hour early, and the mkt didn't bottom until the next afternoon.. And that was in a bull mkt. I don't think we are in abull mkt anymore
 
F. d' Anconcia:

Your analysis may be correct. Not long after the first of those TRIN numbers CNBC announced that trading curbs were in.

The never mentioned it again the rest of the day.
 
Quote from F. d'Anconia:

At 11:45am today the NYSE trin spiked to 3.80 and on the Nasdaq to 5.09. Both of these are relatively unheard of levels.

My personal theory is that when the S&P broke down to new lows of the year (at the same time), major sell stops were hit and tons of program trading went off. Once this selling was over it was only natural that the markets slowly ground upwards into the close with all bigger sellers done.

anyone care to discuss or offer any opinion?

Mind you, in no way am I calling for some sort of bottom here (I am strictly intraday so I could care less), am just talking about what happened during the day. If I had to bet longer term I think its still down further.
More...

I saw the same thing on the TRIN. When I saw it in the upper 2's, I covered my NQ short close to the day's lows (I covered at 1533).

I usually care more about the direction of the TRIN than the levels. Today was an exception.

When I daytrade I have the TRIN on my screen. I find it useful in indicating the true buying and selling pressure.

As for long term, I see the TRIN as of little use. I'll believe the market is strong when it is hitting new highs.
 
Interestingly when the 6 month lows were penetrated it turned. It was "panic" selling undone. Smells of manipulation.
 
It was interesting because of the unusual Trin spikes today. Here's how I understand the usefulness of Trin for intraday daytrading.

Trin is cumulative for the day and becomes less useful as the day progresses, except that it's helpful to watch the direction of Trin rather than the absolute number and when it's in a trading range of say .4 to 1.0 one would consider this as a modestly strong market advancing well. As it gets nearer to .4 it's advancing stronger and as it gets nearer to 1.0 it's advancing less strongly for the day. Using both the Nyse and Nasdaq Trin, it is difficult to get helpful signals from Trin other than confirmation of minor changes in direction of the market. For example if Trin is weakening I would look for a corresponding positive directional change in the market. And If Trin is getting larger I look for a corresponding market weakening. I consider Trin not very useful as an absolute trading signal especially when between .4 and 1.0

However, when Trin is outside .4 to 1.0 it becomes more useful as a confirmation signal. If Trin is less than .4 or smaller, one would interpret this as a strong market getting even stronger with complacency and overconfidence setting up the stage for a possible reversal and selloff. When Trin is greater than 1.0 and less than 1.5 the market would be considered weakening so one would look to short or sell longs. However when Trin is greater than 1.5 there is a lot of pessimism, perhaps too much pessimism, so look for a possible reversal of the market by covering shorts and going long when the market reverses upwards.

Then there is the extreme pessimism when Trin is over 2.0, like this morning, setting the stage for a reversal to the upside. This would be an extreme sell off, and one would buy everything in sight as the market bottomed and reversed back upwards. This morning when Trin got over 2.0, I was buying on the way down, but as it turned out, buying too early as Trin got to unexpectedly extreme highs. Fortunately the market finally did reverse and the buys eventually turned profitable. But I was in the red for quite a while and really sweating it.

Trin is not an indicator by itself nor can it pick the bottom or the top nor an exact reversal but is helpful in getting a feel for what's happening with a higher degree of confidence.

Any thoughts? Thanks for any feedback.
 
Kowboy,

I agree. I look at the TREND of the $TRIN rather than its absolute value. It is one of the ways to get a feel for the bias of the intraday market.

You can apply moving averages to the $TRIN to help determine its trend.

When trending up, look for shorting opportunities, and look for long opportunities when trending down.

Charles
 

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Charles Trader,

Is the Trin smoothed on your chart? What is the period of 20 average computed on? Minutes , 5 minutes, or what( the red and green line)? Looks like an innovative idea.

Thanks
 
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