Heinz, It`s really hard to get an accurate read on the market using TRIN.
TRIN is calculated: (advancers/decliners) / (advancing volume/declining volume)
Readings of less than 1.00 are bullish.
Readings of more than 1.00 are bearish.
Day 1: 1000 advancers, 100 decliners, with 1,000,000 shares up volume and 100,000 shares down volume. TRIN = (1000/100)/(1,000,000 /100,000) = 10/10=1.00.
Day 2: 100 advancers, 1000 decliners, with 100,000 shares up volume and 1,000,000 shares down volume. TRIN = (100/1000)/(100,000/1,000,000) = 0.1/0.1 = 1.00.
On Day 1, bullish day but the TRIN was neutral. On Day 2, bearish day but the TRIN was neutral.
Day 3: 1000 advancers, 100 decliners, with 1,000,000 shares up volume and 200,000 shares down volume. TRIN = (1000/100)/(1,000,000/200,000) = 10/5 = 2.00.
Day 4: 100 advancers, 1000 decliners, with 200,000 shares up volume and 1,000,000 shares down volume. TRIN = (100/1000)/(200,000/1,000,000) = 0.1 /0.2 = 0.50.
On Day 3, a bullish day but the TRIN was very bearish. On Day 4, a bearish day but the TRIN was very bullish. |
