Market Internals For Day Traders A Deeper and Advanced Understanding of Market Internals Free Trading Videos.com, Inc dba Grok Trade

Car Internals

Market Internals TRIN TRINQ VIX BANK VOLD VOLDQ

$TRIN

$TRIN The TRIN is short for TRaders INdex also known as ARMS Index, named after its inventor, Richard Arms. An inverse center oscillator. a rising TRIN is bearish and a falling TRIN is bullish. The TRIN is the advance/decline ratio divided by the advance volume/decline volume ratio: ((Advancing issues/declining issues) / (advancing volume/declining volume)) for the NYSE

$TRIN “Normal” ranges Greater than 1.0 indicates that more volume is moving into declining stocks A ratio of 1/1 = 1.0 and means that the market is in perfect balance. Less than 1.0 indicates that more volume is moving into advancing stocks Neutral range is between 0.8 and 1.2

$TRIN TRIN chart setup 5 min bar chart Horizontal lines at 1.20 and .80 levels to show more bullish and bearish market breath. Some like a horizontal line at 1.0

$TRIN

$TRIN Basic TRIN levels 2.5 and higher is oversold 1.2 + is “x%” more bearish 0.80 – 1.20 neutral 0.80 - 0.6 is “x%” more bullish 0.60 and lower is overbought

How to Use $TRIN Current Level Bullish; Neutral; Bearish Trend of the TRIN Direction the TRIN is traveling relative to price action.

SPY Intraday chart

$TRIN Intraday chart

$TRIN Some standard rules If price is trending upward but the TRIN is staying flat (not bouncing) perhaps around 0.50 - 0.80, then upward trend may continue. If price is trending downward but the TRIN is staying flat (not bouncing) perhaps in the 1.2 to 1.5 range, then downward trend may continue.

$TRIN Some standard rules cont… If price gaps down and you get flat TRIN around 1.5 - 2.0, then continuation of gap direction may continue (watch gap fills). If price gaps up and you get flat TRIN around 0.50 – 0.8, then continuation of gap direction may continue (again, watch gap fills)

Grok $TRIN Trade***** If TRIN closes > 2.0, there is a 92.5% chance of a higher high than the close during the next day’s session. Mean +1.158% gain If TRIN closes below < 0.60, there is a 84.6% chance of lower low than closing during the next day’s session. Mean -0.758% drop *- Based on historic data since 1998

$TRIN Trade Hourly Chart

TRIN Trade *** Last 30 min of market check TRIN If at extreme reading - set up trade Greater than 2.0 long ES; SPXL; TNA Less than .60 Short ES; long SPXS or TZA Enter trade IF still in extreme reading 5 min to close Exit trade next morning Set stop and manage or trailing stop

$TRINQ

$TRINQ The $TRINQ is the $TRIN for the NASDAQ Also an inverse oscillator Measures the ((Advancing issues/declining issues) / (advancing volume/declining volume)) for the NASDAQ “Neutral ranges” again occur between 0.8 and 1.2

$TRINQ Basic TRINQ levels 2.5 and higher is oversold 1.2 + is “x%” more bearish 0.80 – 1.20 neutral 0.80 - 0.4 is “x%” more bullish 0.40 and lower is overbought

$TRINQ

$TRIN and $TRINQ Confirmation

Bullish Confirmation If price is moving in an uptrend with both $TRIN and $TRINQ dropping in a downtrend (but not at overbought levels), it is more likely that the price trend will continue up.

$SPY Uptrend

$TRIN Bullish Confirmation

Bearish Confirmation If price is moving in an downtrend with both $TRIN and $TRINQ rising in an uptrend (but not at oversold levels), it is more likely that the price trend will continue down.

$SPY Downtrend

$TRIN Bearish Confirmation

$TRIN and $TRINQ Divergence If price is moving in an uptrend without one or both $TRIN and $TRINQ dropping in a downtrend (and not at overbought levels), it is more likely that the price trend will not continue up. Indicates lack of volume interest by buyers

$TRIN and $TRINQ Divergence If price is moving in an downtrend without one or both $TRIN and $TRINQ rising in an uptrend (not at oversold levels), it is more likely that the price trend will not continue down. Indicates lack of volume interest by sellers

$VIX

$VIX The $VIX is constructed using the implied volatilities of a wide range of S&P 500 index options. The ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge".

$VIX “Normal” ranges: VIX values greater than 30 = high  large amount of volatility as a result of investor fear or uncertainty VIX values below 20 = low less stressful, even complacent, times in the markets Can shift to 20 and 11 levels at times as well. Ever-shifting environment

$VIX

Overbought/Oversold $VIX “When the VIX is high it’s time to buy.” We’re not necessarily going to buy a high VIX, but careful how we go short. “When the VIX is low it’s time to go.” We’re not necessarily going to buy a low VIX, but we will be careful how I go long.

$VIX (longer term)

$VIX (Confirmation Intraday)

$VIX (Divergence Intraday)

$VXN & $VXD The VXN is a measure of implied volatility for the Nasdaq 100 (NDX). The $VXD tracks the Dow Jones Industrial Average (INDU)

$BANK

$BANK BANK Index (NASDAQ) A market index that tracks over ~470 banks listed in the NASDAQ. TIP: The markets are only as strong as the financials.

$BANK (daily)

$BANK Index Chart Setup Track alongside a major market index (i.e. COMPQ, SPX, INDU, etc) Use the same time frame If tracking the $SPX 5min chart also track the $BANK 5min chart side-by-side

$BANK (intraday)

$BANK $BANK tips If the markets are bullish, the financials should also be bullish to validate the rallies strength. If the markets are weak, the financials should also be weak.

$BANK $BANK tips cont… Take note if a divergence develops between the market and the financials. The $BANK index can often lead the broad market at key reversal points.

Bank – Divergence

$VOLD & VOLDQ***

$VOLD Known as Net Volume $VOLD is an indicator of net volume on the NYSE. $VOLDQ is an indicator of net volume on the NASDAQ Advancing volume - declining volume

$VOLD Chart Setup Chart ZEROS each day* Use a 10min CS chart Good for trend continuations Watch for legs of continuous rises or drops. Any reversal could mean a market correction.

$VOLD - Levels $VOLD: set horizontal lines at zero, 500m, 700m, 1b, -500m, -700m, and -1b Over 1b is extremely bullish Over 700m is very bullish Over 500m is bullish Under -500m is bearish Under -700m is very bearish Under -1b is extreme bearish Zero

$VOLD

$VOLDQ*** Key on bodies not shadows 10min candlestick chart Watch for legs of continuous rises or drops. Any reversal could mean a market correction. Key on bodies not shadows

$VOLDQ - Levels $VOLDQ: set horizontal lines at zero, 500m, 1b, 1.5b, -500m, -1b, -1.5b Over 1.5b is extremely bullish Over 1b is quite bullish Over 500m is bullish Under -500m is bearish Under -1b is quite bearish Under -1.5b is extreme bearish Zero

$VOLDQ

$VOLD and $VOLDQ $VOLD/$VOLDQ tips An indication, on the $VOLD, beyond plus or minus 500m gives greater probability of continuation of trend. (Willie Wonka trade)

$VOLD and $VOLDQ $VOLD/$VOLDQ tips cont… $VOLD and $VOLDQ is net volume, so when rapid increases or decreases present themselves, it shows more of a one-sided market sentiment which creates greater probability of follow through.  Can be dangerous to try to trade against this internal breath action.

$VOLD and $VOLDQ Again, to help confirm a market trend, look for $VOLD +/– 500m $VOLDQ +/- 1b IMPORTANT: There are no overbought or oversold conditions on volume. The greater the net volume number (either direction), the greater the probability of follow through.

$VOLDQ Day Trader Tool*** 10 min candlestick chart Key on closed bodies not shadows Watch for higher lower bodies for uptrend to continue Watch for lower higher bodies for down trend to continue Any reversal of CLOSED candles could mean a market reversal.

Market Internals The incorporation of broad market indicators into your trading arsenal can be one of the most powerful methods available to globally improve your charting skills. When applied correctly, these "indicators" add to or subtract from the relevancy placed on the actual price and volume action of a particular broad market(s).

Market Internals With this knowledge in your hands, you can better judge the relative strength or weakness of individual securities. Compare the way the price or the broad markets are moving to the individual stock (or other) for added confirmation.