TRIN and TICK

TRIN Overview:

Richard Arms developed the TRIN, or Arms index, as a contrarian indicator to detect overbought and oversold levels in the market. Because of its calculation method, the TRIN has an inverse relationship with the market. Generally, a rising TRIN is bearish and a falling TRIN is bullish. Sometimes you will see the scale of the TRIN inverted to reflect this inverse relationship.

Calculation
The TRIN is the advance/decline ratio divided by the advance volume/decline volume ratio:

TRIN 5 min The direction (not the level) is the most important. If the trend is up, then it is bearish. For example, if it's the middle of the day and the market is falling, but the TRIN begins to trend upwards, then it is very likely that the market intra day downtrend will reverse and trend up - and vice versa.
TRIN 60 min Greater then 1 is bearish, while less then 1 is bullish. However, extremely high levels, such as above and especially 2.5 are rare and are a bullish contrarian indicator.
TRIN 3 month For example, the longer the TRIN remains above 2, the more likely the market is to experience a strong rally

http://breakpointtrades.com/indicator_TRIN.htm
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NYSE TRIN (Trading Index):
The NYSE TRIN (Trading Index) shows the relationship between stocks that are advancing or declining in price and the volume associated with these stocks. It is calculated by dividing the Advance/Decline Ratio by the Upside/Downside Ratio. The TRIN Index is a short-term trading tool. The goal of the indicator is to determine if volume is flowing into advancing or declining stocks and by what magnitude. The TRIN Index was first published by Richard W. Arms, Jr. in 1967. Generally, the TRIN Index is interpreted as bullish when it is below 1.0 and bearish when it is above 1.0.

TRIN rule:
1. If the trin is trending higher and making higher highs on the day, I will ignore all long setups.
If the trin is trending lower and making lower lows on the day, I will ignore all short setups.
2. If the trin closes above 2.0. the market has an 80% chance of rallying the next day. If the trin closes below 0.60. the market has an 80% chance of selling off the next day.

John Cater's Tick rule:
1. If I am long and the markets hit +1000 ticks, I will use that as a signal to exit the remainder of my position. If I am short and the markets hit -1000 ticks, I will use that as a signal to exit the remainder of my position.
2. I setup audio alerts at all the key tick levels (600, 800, 1000 levels)
3. When the ticks spend 90% of their time above zero with repeated extreme high tick readings, I ignore all day trading short setups and focus on longs, and vice visa.

bayliner1979 于 2009-4-21 16:54 :
stockhq的观察是对的。我用IB的5-min TICK, TRIN chart.
比如今天3:00pm左右850的高点，TICK进入了高于1000的extreme area，这时TRIN<1.0是个confirmation>1.0的话，就不是confirmation，多半3:30pm就趴窝了(i.e., throw back to the support line underneath)。
Bearish state正相反，TICK enters <-1000 extreme area, at this moment TRIN > 1.0 is a confirmation (of bear). Otherwise, likely throw up to the resistance line above.

http://www.quote.com/us/stocks/quote.action?s=$TRIN
http://www.quote.com/us/stocks/quote.action?s=$TICK