Trin - I will post this on the trading desk as well.
Check out www.yamner.com go to yamner univ and then yamn library. Look for the trin document. I just fixed the site. Sorry about the bad IP address that was up there for a few days.
Trin - short Term tRading INdex. Its a ratio of advancers to decliners divided by advancing volume/declining volume.
Trin - (advanc issue/declining) / <advan volum/declin volum)
Lets say you have a bad day and at the open you have 2000 advancers and 4000 decliners. Advancers would be stocks up for the day, decliners are stocks down for the day. Your top ratio (numerator) is 1/2. Now lets say right at the open advancing volume (for simplicity) 20 million and declining volume is 80 million. You denominator is 1/4. So its (1/2) / (1/4) for a trin of 2. Lets say that the market is still red, down for the moment, but advancing volume starts to creep back, stocks are recovering, the market is coming back a bit.
Lets keep the top ratio the same for simple math. adv/dec is 1/2. but advancing volume is now 40 and declining is now 40, for a bottom denominator of 1. 1/2 / 1 = .5 You could run this scenario, fact patter for all sorts of incremental changes, what you would end up basically would be the following:
1. Basically, a trin of 1 is neutral.
2. If the market is bad, an increasing trin, regardless of where it is, is bearish. This means declining volume is strong, the move to the downside has momentum. if the market is bad and the trin is coming down, 2 to 1.8 to 1.6, it is bullish. This means that upside volume , buyers are coming in.
3. In a good market, if the trin is going higher, it is bearish, this means that upside volume is disipating and we may hit a top.
4. IN a good market, if the trin is going lower, it means more upside volum is coming in.
Remember, nothing is a cure-all, a pure indicator 100% effective. This is just one of the many things I look at because it shows advancers to decliners relative to the advancing/declinine volume. It shows the committment of the move to the up or down side and shows the incremental change when studied moment to moment. Like stocks, (because the trin comes from the stock prints) the trin can chang on dime.
Regards,
steve@yamner.com |
