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1. Has anyone applied the Trin indicator to the 1929 market just before
and after that crash, and what were the results?
2. WSJ online requires a subscription to be able to access it.
Lionel
At 12:20 AM 11/2/97 -0800, Chip Anderson wrote:
>This week's Barron's has an extensive interview with Martin Zweig.
>Below is a portion where he discusses what the TRIN indicator has been
>up to and how he sees it historically. Since my data doesn't go back
>that far, I found it very interesting.
>
>The entire article can be found at
>http://interactive.wsj.com/edition/current/articles/SB87834117132170500.htm
>
>Chip
>
>===========================
><snip>
>
>MZ: And there was another bullish technical indicator this week I want
>to mention.
>
>Q: Which is?
>A: I wrote an article about this one in Barron's, back in May 1982.
>It's called TRIN, the trading index Richard Arms invented, so
>sometimes it's called the Arms Index. We had an enormous TRIN on
>Monday; my unofficial number was 8.97, which is the third-highest one
>I've ever gotten.
>
>Q: And TRIN, for the technically challenged, is --
>A: TRIN is the advance/decline ratio, divided by the up/down volume
>ratio on the New York Stock Exchange. I only have data back through
>1965, because up/down volume data weren't collected until sometime in
>1964. I follow TRIN on a 10-day moving average basis, and if the
>10-day average hits 1.5, it's pretty bullish.
>
>Q: That doesn't happen very often.
>A: No. If you take out what were essentially duplicate signals, like
>September '74 and November '74, there have been only six previous
>signals. I'll give you the months: September '66, May '70, September
>'74, March '80, August '82, October '87. Every one of those signals
>came within moments of the bottom of a bear market. In '87, in all
>fairness, you actually got the signal on the Friday before the Crash.
>And obviously, the first day after that was horrible. But I'm not
>trying to say the signal occurred simultaneously with the bottom. In
>'66, it came when you were within a week or two of the bottom. In May
>of '70, it was about two weeks before the bottom. The September '74
>signal was about a week before the bottom. In March of '80, you were
>right about at the bottom and the same with August '82. But even
>measuring from the day of the signal, so including Oct. 16, 1987, when
>you got killed the next trading day, the average gain one year later
>was 28.9% on the S&P. If you waited one day to buy, that average gain
>would have been 33%. I'm not trying to make a federal case here, it's
>only one indicator. But this indicator is designed to show an oversold
>market where there is a lot of fear. Where there is a tremendous
>concentration of dumping of stocks. The up/down volume ratio was
>169-to-1 on the downside on Monday. The only day higher than that,
>ever, in my numbers, was Oct. 19, 1987, when it was in the ballpark of
>500-to-1. So if you want to talk about heavy concentrated selling,
>fear and panic, you had it on Monday. Now, that doesn't prove you're
>at a bottom.
>
><snip>
>_____________________________________________________________________
>Sent by Yahoo! Mail - http://mail.yahoo.com
>
>
>
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