I would like to respond to all the emails Toddo and I have received regarding the performance of the market directly after the NYSE TRIN indicator (originated by my good friend Dick Arms) closes over 3 - good spot and work Jason. As pointed out by Jason, since 1998, I too found nine instances of a NYSE TRIN reading over 3. Each instance was followed by a positive session in the Dow Jones Industrial Average.
On the surface, that is a no-brainer trade and very well may be. Underneath the surface I am not so sure. Each prior reading over 3 that had a meaningful gain came from deeply oversold territory and a dramatic down move. Yesterday was not a good day, but it certainly couldn't be characterized as overly dramatic and the market is certainly not oversold on the daily charts.
Table 1 - What happens when the NYSE TRIN closes over 3?
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