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Strategies & Market Trends : News Links and Chart Links
SPXL 225.98+1.9%Dec 10 4:00 PM EST
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To: Les H who wrote (5213)3/7/2003 5:18:57 AM
From: Chris McConnel  Read Replies (2) of 29602
 
Trin-10 back above 1.5

Didn't get much of rally off the last Trin-10 countdown. Maybe this one will work better.

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Don't Run With the Emotional Crowd
By Dick Arms
Special to RealMoney.com
03/06/2003 08:07 AM EST

THE MARKET:
The Arms Index for the New York Stock Exchange hit 3.69 Tuesday, this indicator's highest reading in almost two years. It also marks only the 17th time in the past 20 years that the index has registered a level above 3.00, and was the second-highest reading since the start of the new century.

A reading of 3.69 means that the declining stocks were receiving almost four times their fair share of the volume.

It indicates indiscriminate and unthinking selling of stocks by a scared investment community. It is, to me, a contrary indicator, telling me that I don't want to follow the crowd when it's acting in such an emotional way.

Historically, in almost every case, the very high reading was followed very soon by a strong market advance. It usually got going within two or three days. I see this as another strong indication that we're getting very close to a reversal to the upside. That is also borne out by the level of the 10-day moving average of the Arms Index, which is again above the 1.50 level.
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