Tom Aspray uses a 34EMA of the arms. As he explains:
"As you see from these examples, it is not that the Arms Index will give you a concrete reason to buy or sell, but can give you a reason not to sell by signaling proximity to a price low. One modification that I use to determine the intermediate-term overbought/oversold condition of the US stock market is to run a 34-period exponential moving average (EMA) of the Arms Index."
Now look at this chart.
I have inverted the trin to make lows and highs correspond with the nyse.
The inverted Trin is invisible here and only shows the 34EMA in green.
notice the end of the chart.
Isn't that a positive looking divergence?
http://stockcharts.com/c-sc/sc?s=$ONE:$TRIN&p=D&yr=0&mn=10&dy=0&i=p12221228988&a=110811008&r=8828.png
PS: With today's nice rally, sentimentrader.com was...unmoved.
Lowrisk as of 7/1 was 32% bulls 54% bears.
Edited by Rogerdodger, 02 July 2007 - 09:37 PM.