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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (37567)	3/27/1998 8:19:00 AM
From: Patrick Slevin	Respond to of 58727

I don't think the Arms Indicator (TRIN) was used then. Bears were much more powerful then as well, I would suppose. The huge monies that exist today would mean that crisscrossing DJIA 1000 a few hundred times would be equivalent to crisscrossing DJIA 10,000 a few hundred times but with perhaps 1,000 point swings. Everything is relative. I don't remember the DJIA getting crossed so often, but without a chart I have to defer to your Dad's memory. My experience is based on trading off Instinet and SelectNet. I never used the TRIN as people like to look at it today, it seems. I've seen where people look at it with simple MAs, Exponential MAs, and so forth. I understand the concept, which is to monitor the volume of Advancers with respect to Decliners. But I only had limited success with it trading Intraday and I think I know what the flaw in it is but I cannot adjust for it.....well I guess I could but it seems hard to do. The problem I think it has is that it weights all stocks equally. You get GE, XON, moving up a point on strong volume but a handful of lesser capitalized stocks moving down on strong volume the Arms Index gives a poor reading. I used TRIN because I was trading OEX then. I believe the OEX is weighted by capitalization, I'm sure the SPX is. I think 4 stocks comprise 12% of the value of the SPX. Even if 25 lesser stocks were going down, but GE, XON, MSFT, and whatever the 4th stock is were going up.....it's a good bet the market is going up as well. But the TRIN is already biased 25 to 4 against it. A second problem is that everyone uses it; a third problem is that it is a lagging indicator. Anyway, if it works for you, fine. I look at it but only as a secondary indicator for confirmation.