Tuesday, June 8, 2010

The Arms Index - Historical high reading

What does it mean ?
The Arms Index has recorded the 3rd highest reading in the history of the index first introduced in 1967.  Here is an extract from our analysis of this stock market bottom using The Arms Index.
                                              
The Arms Index - Current reading
Here is a daily chart of the Arms Index also called TRIN over the last 7 years:
                                                                                                                            



















I have marked spikes in the index with a green circle and you can see that extreme readings are normally associated with at least an intermediate bottom in the stock market.

The inventor of the index Richard Arms tested out which moving averages work best at indicating an intermediate bottom in his book "The Arms Index" that I studied some years back. His conclusion....

See more of the analysis and the conclusion by subscribing to our premium membership at http://www.elliottwavetechnician.com/.
 
Geir Solem
http://www.elliottwavetechnician.blogspot.com/
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