The Arms Index, better known as the market internals TRIN index, determines the relationship between the ratio of advancing to declining issues and the ratio of advancing to declining volume. The Arms Index measures the internal dynamics of the market, ascertaining direction and strength of volume. Low Arms Index numbers indicate proportionately greater activity (demand) for an advancing issue — very bullish. Low numbers indicate greater activity around a declining market — bearish. As a moving average, the Arms Index indicates an overbought or oversold condition.
It is calculated by dividing the Advance/Decline Ratio by the Upside/Downside Ratio. The Arms Index was developed by Richard Arms in 1967. Over the years, the index has been referred to by a number of different names. When Barron's published the first article on the indicator in 1967, they called it the Short-term Trading Index. It has also been known as TRIN (an acronym for TRading INdex), MKDS, and STKS.
Live TRIN (Arms Index) Chart by FreeStockCharts
- Arms Index (TRIN) - Overview from Richard Arms' ArmsInsider.com
- "The Arms Index" by Richard W. Arms, Jr.
- "The Arms Index, Equivolume Charting, Ease of Movement, and Volume Adjusted Moving Averages" Seminar Audio On-Demand from INO TV