TRIN (Arms Index)
Definition of 'TRIN (Arms Index)'
It is calculated as follows:
TRIN = ((ADV/DECL)/(UVOL/DVOL))
ADV = Number of advancing stocks on the NYSE
DECL = Number of declining stocks on the NYSE
UVOL = Total volume of advancing stocks on the NYSE
DVOL = Total volume of declining stocks on the NYSE
A ratio of 1 means the market is balanced. A ratio above 1 tells traders that volume is in declining stocks (bearish sentiment) with a reading reaching 1.5 being very bearsih. A ratio below 1 indicates that volume is in advancing stocks (bullish sentiment).
It is continuously displayed during trading hours, among other indices, on the New York Stock Exchange's central wall display for the stocks traded on that exchange.
It is important to note that the index is calculated based on number of shares traded, not their dollar value. Therefore, a highly-traded stock with a low share price will affect the index more than the same dollar volume traded in a higher-priced stock.
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