TA Tips

1.[QJ] What does Probing Bar really mean?

Here are a few Probing bars on SPY and XLF this week, From ThinOrSwim, between 4PM to 4:15PM on Oct.30th.09.

The general theory is probe bar are closing trades late settlement from earlier in the day. Some people believe that is the Mkt MM's sunc up signals because SPY P-Bar works most of the time and XLF P-Bars works everytime for next day over the past months.

So what should we believe? I think since it works, we will assume it works until one day it is no longer work.The most reasonable thought that I can give is: for example yesterday's XLF hit 14.44, and today P-Bar again point to 14.44, if this is settled transections, then we know there are mktMM got in at 14.44 and Monday they might want pull XLF to 14.44 so those transections can get out.

2. Arms Index (TRIN)
Richard Arms developed the TRIN, or Arms index, as a contrarian indicator to detect overbought and oversold levels in the market. Because of its calculation method, the TRIN has an inverse relationship with the market. Generally, a rising TRIN is bearish and a falling TRIN is bullish. Sometimes you will see the scale of the TRIN inverted to reflect this inverse relationship.

Calculation
The TRIN is the advance/decline ratio divided by the advance volume/decline volume ratio:

A number of TRIN interpretations have evolved over the years. Richard Arms, the originator, uses the TRIN to detect extreme conditions in the market. He considers the market to be overbought when the 10-day moving average of the TRIN declines below .8 and oversold when it moves above 1.2. Other interpretations seek to use the direction and absolute level of the TRIN to determine bullish and bearish scenarios. In the momentum-driven markets, the TRIN can remain oversold or overbought for extended periods of time.

3. TICK: Each individual move from one stock trade to another. An UP-TICK means the price moved up on the last trade and a DOWN-TICK means it moved down. If there is no change from the last trade, the TICK is considered neutral. The TICK statistic on the NYSE is the net of all UP-TICKs minus all DOWN-TICKs at a given point during the day. If 1000 stocks advanced on their last trade or TICK, 500 declined and 200 were unchanged, the TICK would be +500 (1000 minus 500 equals +500). The closing TICK is based on the last trade of the day. TICK statistics are available for the NYSE, Nasdaq and AMEX.

4. TA on demand and supply indicator is the best one to use with volume.
Momentum indicator is based on price and volume. It's a good leading indicator. It shows good divergence.
MACD is a pretty good demand and supply indicator.
RSI seems a good leading indictor too.

5. Charts

Stock charts:
http://www.freestockcharts.com/
http://www.bigcharts.com/

Future charts:
http://www.quote.com/