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Strategies & Market Trends : Tech Stock Options
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To: ViperChick Secret Agent 006.9 who wrote (30835)12/10/1997 2:14:00 PM
From: Esteban  Read Replies (1) of 58727
 
Lisa,

After reading the TRIN postings you suggested on the daytrading thread, I've been studying its intraday movements for the past 4 weeks for which I have data. I must say there seems to be some value to using this concept as an intraday timing indicator in 2 ways.

#1: As a divergence indicator. If TRIN rises more than .20 while prices also rise (or visa versa), expect a reversal.

#2: As an overbought/oversold indicator. This condition occurrs much more frequently than #1. If TRIN falls more than .20 while prices rise, expect at least a corrective move. One problem with this method is like any ob/os indicator, prices may rise/fall substantially while in the os/ob zone. This was only a problem twice out of 12 applications where the .20 rise/fall was triggered, today being one of them.

Using one's subjective sense to interpret TRIN could be helpful if one is objectively subjective (:>) For example today TRIN very early on was in a totally different volatility range than the previous days of the study, so the .20 value was suspect immediately as valid for today. A look at a TRIN chart should explain why this could be an "objectively subjective" conclusion.

Another point to consider is that the first 30 minutes of trading should be discarded when considering the change in TRIN value. I don't think there is enough data yet to establish a benchmark for the day until 30 min have passed.

Note this was a quick looksee study, not at all comprehensive. I'll look at the close to close applications next.

BTW, I enjoyed your Sr. Del Gato poem. I think you ended it at the appropriate place.

Esteban
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