TRIN

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Patent #: US 7,831,984 B2
MarketVolume®'s technology of displaying and presenting intraday volume and volume based technical indicators is protected by copyright law and patent. Unauthorized distribution or reproduction of proprietary technologies will be prosecuted to the maximum extent possible under the law.

Richard Arms developed the TRIN indicator (which is also known as the ARMS indicator) in the 1970s. The TRIN indicator is calculated by dividing the Advances/Declines (AD) Issues Ratio by the AD Volume Ratio.

At the current moment we are the only source who provides TRIN for U.S. indexes and exchanges which allows to use it in the S&P 500, NASDAQ 100, Russell 2000 and other indexes technical analysis and market timing.

The formula for the TRIN indicator (or TRIN) is simple:

TRIN = (AD Issues Ratio)/(AD Volume Ratio)

Or to put it more specifically:

TRIN = ((Advancing issues/declining issues) / (advancing volume/declining volume))

The TRIN was developed as a contrarian indicator with the intent of pinpointing the critical levels at which a market becomes overbought or oversold. Generally, a rising TRIN indicates bearish sentiment and a falling TRIN indicates bullish sentiment. The TRIN indicator may be applied to any index or basket of stocks. Some sources refer to the TRIN indicator applied to the New York Stock Exchange (NYSE) as the "NYSE Short Term Trading Index".

Analysis based on the TRIN indicator have evolved over the years. Richard Arms original concept was to use the TRIN as an indicator for detecting critical market levels. He assumed that a market was overbought when the 10-day moving average of the TRIN declined below 0.8. Conversely, he considered a market oversold when this moving average rose above 1.2.

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