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Arms Index

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Arms index
Also known as a TRading INdex (TRIN). The index is usually calculated as the number of advancing issues divided by the number of declining issues. This, in turn, is divided by the advancing volume divided by the declining volume. If there is considerably more advancing volume relative to declining volume this will tend to reduce the index (i.e. increase the denominator). Hence, a value less than 1.0 is bullish while values greater than 1.0 indicate bearish demand. The index often is smoothed with a simple moving average.

Arms Short-Term Trading Index
Also called TRIN. In technical analysis, a measure of the strength of short-term market movements. It is calculated thusly:

TRIN = (Advancing securities / Declining securities) / (Volume of advancing securities / Volume of declining securities)

A TRIN measure below 1 indicates that there are more advancing securities on higher volume and is therefore a bullish indicator. A TRIN above 1 indicates the opposite and is thought to be bearish.


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His Equivolume charting system is now part of the most popular stock and futures software, and his Arms Index -- also known as the Short-Term Trading Index or TRIN -- has become one of the most important technical tools on Wall Street.
 
 
 
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