Wednesday, August 20, 2014

TRIN Arms Index Daily Chart Signaling Near-Term Market Top

The TRIN prints an uber low 0.50 showing that the bulls were in full control today. Under one the bulls rule the roost and above one the market bears rule the markets. The 0.80-1.00 area is consistent with steady eddy buying that can last a while. The uber low 0.50 print is over-the-top bullishness where a top typically occurs. The red circles show prior market tops. The drops in the SPX were (pulling them off an SPX chart give or take a few handles); 45 points, 25, 35, 30, 70, 70, 50, 50, 55, 35 and 35. So the average drop in the SPX after the low TRIN occurs is 45 points. From the current SPX 1987 price that would target 1942. If bulls push a bit higher tomorrow say into the low 1990's the downside target is the 1940's.

The early July low TRIN marked the July 4th top. Remember that joyous market move into the holiday weekend then the selling afterwards? Stay alert. Markets would be expected to top now and the SPX to sell off 45 handles over a few days time. The timing is tricky with the TRIN so simply take it day to day hour to hour. 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.

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