Saturday, April 18, 2015

TRIN Arms Index Daily Chart

The previous TRIN chart scenario plays out with a market top occurring a few days after the low 0.42 print (red circle). The 0.50-ish area is uber bullish euphoria so markets need to sell off to bring everyone back to earth which they did. The red square shows where the SPX topped out at 2110-ish. Then boom; payback time. Stocks drop and the TRIN sky rockets to 4.00 a big-time spike higher so now the shoe is on the other foot.

The spike higher signals that the bearishness was off the charts on Friday and that a near-term market bottom will occur at any time in the days ahead. It would not be surprising to see a recovery move on Monday, if not, then the stock market may toy around with sideways to sideways lower bias for a couple days but the near-term rally will occur and begin since the negative sentiment ran too high as shown by the TRIN at 4.00. Reference the prior chart to get a feel on how the TRIN can be used as a timing tool; the prior chart with the uber low TRIN  forecasted the market topping process and a selloff while the uber high TRIN now forecasts a market bottoming process and near-term comeback rally to occur. 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.

Note Added 8:15 PM on Monday evening, 4/20/15: The relief rally desired by the uber high TRIN occurs right away today, Monday, 4/20/15, with stocks recovering most of Friday's losses. Interestingly, the CPC and CPCE put/call ratios plummet and are signaling complacency again. CPC is 0.79. Markets are preparing to print another near-term top any day forward. The markets continue the choppy sideways behavior this year.

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