today's TRIN Spikes

The attached chart is a 5 minute chart. I have the $TRIN blackened out so that only the moving averages show. Both averages are simple moving averages of the 5 minute $TRIN.

The white line is the 20 period simple moving average. The other line is the 8 period simple moving average. When the 8 is above the 20, the 8 period average is red. When the 8 is below the 20, it is green.

I also do a similar thing with the $TICK and Futures Price. You have a strong indication when everything is trending in the same direction.

Charles
 
OK. Thanks for the suggestions. Attached are the Trin charts from this moning with sma(20) vs sma (4). Looks helpful and much better than just following Trin itself.

Ib symbols are $trin-nyse and $trin-nasd

Thanks
 

Attachments

Sorry this was my mistake. I'm getting it from Medved QT from an IB feed. I don't know how to do this directly from IB. The symbols may be some different on IB directly.

Sorry.
 
Quote from kowboy:

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.
More...

Well put. And I'd agree. If the TRIN is going down as the market is going up, I would be more confident of buying. If the TRIN is going up while the market (esp. index futures) is going up, I would be less confident.

On Interactive Brokers you can trigger a trade based on the level of something else, like an index (TICK, TRIN). I've considered putting a buy order if the TRIN hits 2.7. Next time I might well do it.
 
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