Sharp,
Sounds like the VIX has a pretty good track record for predicting intermediate market moves. From the chart you listed - what are the key levels of support that you look at?
My familiarity with TRIN, is that it can work as a short-term predictor, or the moving average can be used for intermediate and long term trend indicators.
Todays TRIN was cruising in the 3's much of the last hour, closing in the 2.7's - still very high. Coupled with Mondays figure, I would almost guarantee a strong finish tomorrow (based on similar historical patterns). However, an astronomical one day TRIN is just a short-term trading indicator. We should get 2-3 days of upward movement out of it IMO, after that anyones guess.
In this context, we can have a little relief rally here, but still keep the VIX trend intact. I'd not been much of a trader in the past month. Yeah, I picked up some SUNW and a few other things in the IRA's, but regarding my taxable portfolio, I was surprised to see that I hadn't made a buy since July 11. So to drag me out of my fear-based trading coma, I felt that the risk vs. reward ratio was much in favor of reward when I picked up DIA.
Of course I could be wrong and the DOW will crash another 200 tomorrow, but there is little reward without taking some risk.
Warp |
