Can anyone tell me if the trin for the NYSE and NASDAQ which I have on my RT setup is a number which accumulates from all trades as the day goes on, or is calculated at the moment or for a shorter time frame? Thanks
TRIN is calculated from the cumulative trade info through the day. Thus there is no moving average or reduced time frame for calculation. That's why TRIN can be misdirecting in certain situations - for instance: 1. On big gap up or down days, intraday moves will be masked since TRIN is based on previous close. If MSFT gaps up $2, then declines by $1.90 intraday, it's still shown on the advancers side of the calcs. 2. The market's been up all day, but starts tanking in the last hour. It will take longer for TRIN to be significantly impacted if compared to had the action occurred early in the day. Thus, after the first part of the trading day, most folks put more emphasis on the direction rather than the value of TRIN.
Intraday TRIN calculations are real time calculations. The formula is a/d issues divided by a/d volume. It is cumulative over the course of the day. TICK is the same formula, but only calculated for the last tick, not a cumulative total for the day. Generally speaking, TRIN < .8 is bullish, TRIN > 1.25 is bearish, while TICK is used as a contrarian indicator. I use TICK < .5 as bearish (very short term!) and TICK > 2 is bullish (once again, very short term!) For example, suppose on the NYSE advancers lead decliners by 2:1, and up volume to down volume is also 2:1.... TRIN would be 1. If the u/d volume was 4:1, (meaning the up stocks were trading twice as many shares as the down stocks), TRIN would be .5.... bullish. If in the same example, u/d volume was 1:1, TRIN would be bearish at 2. So you see, TRIN can vary widely with the same # of advancers to decliners on a price front. Hope this helps.
Swish, very good point... I generally dont use TRIN values directly until after 10:30 for the reasons you stated.... early in the day, direction is more important.
Referring to your first point; shouldn't it be a better idea to base TRIN on the opening price for intraday traders then?
actually., the TICK is <i>not</i> the same formula as the TRIN (Arms Index). The TICK is simply the cumulative ticks at any given moment. If 1000 stocks tick up and 500 tick down, the TICK will be +500.
I know what the difference is chasinfla, but now the advancers and decliners in the TRIN formula are based on yesterdays close. So my question is if you base the TRIN formula ( the advancers and decliners) on the open of the day ( just for intraday trading) wouldn't that give a much better picture of what's happening that day?