Question

Question: If the trading volume in advancing shares on day 1 in the previous problem was 1.1 billion shares, while the volume in declining issues was .9 billion shares, what was the trin statistic for that day? Was trin bullish or bearish?

Table 9.4	Market Advances and Decline
Day	Advances	Decline
1	906	704
2	653	986
3	721	789
4	503	968
5	497	1095
6	970	702
7	1002	609
8	903	722
9	850	748
10	766	766

Short answer

Answer

1.0529; Bearish sign

Step-by-step solution

Definition

The TRIN ratio is defined as ratio of average trading value in declining issues to average volume in advancing issues.

Calculation of Trin ratio and associated explanation

Tri ratio = (Volume of stocks declining / Number of stocks declined) / Value advancing / Number of stocks advanced

= (900,000,000 / 704) / (1,100,000,000 / 906)

= 1.0529

Since the TRIN ratio is over 1, it would be considered as bearish sign.

Since the average volume in advancing issues is greater than average volume in declining issues, this would be considered as a bearish sign.