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

3. Car Internals

4. Market Internals
TRIN
TRINQ
VIX
BANK
VOLD
VOLDQ

5. $TRIN

6. $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

7. $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

8. $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

9. $TRIN

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

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

12. SPY
Intraday chart

13. $TRIN
Intraday chart

14. $TRIN Some standard rules
If price is trending upward but the TRIN is staying flat (not bouncing) perhaps around , 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.

15. $TRIN Some standard rules cont…
If price gaps down and you get flat TRIN around , 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)

16. 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 % 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 % drop
*- Based on historic data since 1998

17. $TRIN Trade
Hourly Chart

18. 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

19. $TRINQ

20. $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

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

22. $TRINQ

23. $TRIN and $TRINQ Confirmation

24. 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.

25. $SPY Uptrend

26. $TRIN Bullish Confirmation

27. 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.

28. $SPY Downtrend

29. $TRIN Bearish Confirmation

30. $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

31. $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

32. $VIX

33. $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".

34. $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

35. $VIX

36. 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.

37. $VIX (longer term)

38. $VIX (Confirmation Intraday)

39. $VIX (Divergence Intraday)

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

41. $BANK

42. $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.

43. $BANK (daily)

44. $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

45. $BANK (intraday)

46. $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.

47. $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.

48. Bank – Divergence

49. $VOLD & VOLDQ***

50. $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

51. $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.

52. $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

53. $VOLD

54. $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

55. $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

56. $VOLDQ

57. $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)

58. $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.

59. $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.

60. $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.

61. 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).

62. 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.