TRIN Arms Index Daily Chart

TRIN is also in agreement with the NYAD, CPC and NYMO. With all four of these very short term trading tools pointing the same way, towards a market bounce, that tells you at a minimum this is not the time to press any shorts. If a rally pop should occur as the last four charts depict, once shorts cover, that will add further fuel to an upside market bounce.

For the TRIN, watch the 1.0 level, very useful in real-time trading for day traders. 1.0 is the bull-bear line where neither side has an advantage, the tug-of-war is equal. When readings venture above 1.0, that is representative of the sellers gaining momo.  As readings move above 2, 3, 4 and higher, the selling is getting out of hand and a snap back market move would be in order to rectify this uber bearishness; exactly what happened for the circled areas.  Readings under 1.0 show that the bulls are in control. Uber low readings such as 0.25 show that the bullish buying is getting out of hand and markets need to pull back down from a euphoric rally.

Thus, at 3.37, TRIN is at the highest close since the last market snap back rally at 11/9/11. The TRIN is agreeable to seeing the broad markets rally so this high TRIN level can come back down towards 1.0. The market pop should be short-lived, however, bears covering shorts may add ample bull fuel once an upside run begins. This projection is a very short term trading manueuver. Note that Keystone's algorithm, Keybot the Quant, remains short since the model operates more in the short to intermedicate term. A 'short the rallies' mode is in play now overall for markets, thus, should an up market move occur now due to the previous four charts, the long side can be ignored and the markets can simply be monitored for the next short entry as the rally occurs. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.