The TradingEdge

[kiy]

Want to build some more around TRIN's parameters...
...from post replying...
Over the years I have read several books about indicators and their trading rules...Some are good and some are worthless..But here are the trading rules for the TRIN....When TRIN gets to .70 or lower go short...35 is extreme..When TRIN gets to 1.30 or higher go long..Over 1.50 is extreme..When TRIN is at 1.50 and above and the TICK is -500 or less..start looking for a snap back ..go long...FWIW...
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Buy when current TRIN crosses above its oversold line. This indicates that bears have wreaked enough havoc on the market, and sentiment is about to change - the market is about to reverse direction and move rapidly to the upside.

Sell when TRIN sinks below its upper overbought line. While the bulls may still possess one or two last gasps of strength, their power is nearly diminished. Rather than playing the fool's game of trying to predict an exact market top, do the sensible thing and short the stocks when TRIN falls below its overbought level - a negative reversal is near.

TRIN is actually most powerful when combined with a reading of NH-NL (new-high new-low index). (For more insight, see 2 Indexes That Help Assess Market Behavior.) The following rules apply: when TRIN becomes oversold and the NH-NL reaches a new low, the downtrend is likely to continue; if TRIN becomes oversold and NH-NL is bullish, then a low has been reached.

If TRIN shifts to overbought but NH-NL hits a new high, the bulls are strong and the uptrend will continue. When TRIN is overbought and NH-NL returns a bearish signal, the stock market top has likely been reached. Feel free to short away!

The strength of TRIN is most pronounced when it diverges from prices. When the stock market hits a new high but TRIN hits a lower peak than it did previously, the bulls are diminishing in strength and the uptrend is ending. This is a bearish divergence between TRIN and the stock market - a strong sell signal.

When the market hits a new low but TRIN reaches a higher low (how's that for an oxymoron?) than its previous decline, the bears are losing power and the market is ready to reverse into a rally. This bullish divergence between TRIN and the market is a strong buy signal.