Technical Analysis from A to Z

by Steven B. Achelis

OPEN-10 TRIN

Overview

The Open-10 TRIN is a smoothed variation of the Arms Index. It is a market breadth indicator that uses advancing/declining volume and advancing/declining issues to measure the strength of the market.

Interpretation

The interpretation of Open-10 TRIN (also called the Open Trading Index) is similar to the interpretation of the "normal" TRIN.

Readings above 0.90 are generally con-sidered bearish and readings below 0.90 are considered bullish.

The following table was reprinted from Peter Eliades' Stock Market Cycles. It shows what the DJIA did after the 10-day TRIN rose above the level of one. Impressive...

Table 9
1st Reading > 1.0Days to Final LowNext Market Move
May 23, 1984360-point rally
June 15, 1984163-point rally
July 20, 19843165-point rally
October 10, 1984088-point rally
November 16, 1984145-point rally
December 5, 1984369-point rally
January 3, 19851130-point rally
March 15, 1985148-point rally
April 30, 1985296-point rally
June 19, 1985378-point rally

I created a similar table for the period 1985 through 1988. The table appears below.

Table 10
1st Reading > 1.0Days to Final LowNext Market Move
June 19, 1985060-point rally
January 8, 19862302-point rally
April 30, 1986N/A16 point rally
July 15, 1986041-point rally
September 11, 19861141-point rally
January 2, 19870445-point rally
October 15, 19872289-point rally
November 13, 1987468-point rally
November 27, 19875285-point rally
January 14, 19885285-point rally
February 8, 1988579-point rally
March 11, 1988053-point rally
April 4, 19880127-point rally
May 12, 1988039-point rally
May 17, 19884211-point rally
July 1, 1988N/A78-point rally
August 12, 19887111-point rally
November 16, 19880309-point rally
October 30, 19895171-point rally
December 18, 19892109-point rally

Calculation

The Open-10 TRIN is calculated by keeping a 10-day total of each of the TRIN's components before performing the TRIN calculation.


This online edition of Technical Analysis from A to Z is reproduced here with permission from the author and publisher.

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