TRIN Arms Index Daily Chart

The TRIN prints an uber low at 0.42 yesterday verifying the excessive bullish euphoria in markets currently. Typically the extreme  low TRIN readings (red circles) identify market tops as the enthusiasm for stocks is at fevers pitch. When the TRIN rockets higher on the positive side (green circles), the negativity is too excessive and a market bottom occurs. The TRIN chart is much more of a nuanced signal than other signals. The low reading at 0.42 indicates that a market top should occur at anytime in the days ahead.

Interestingly, two prior fractals played out with a drop of 10 to 20 SPX handles over a day or two period, then stocks recover back to the current levels for one to four days, then the SPX dropped from 50 to 100 handles. So the expectation is that equities should top out at any day forward and stocks sell off until fear and worry enters the market with the TRIN running above 2.0; that will identify time to buy the dip. 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.