What is the Arms Index?

Answer:
The Arms Index is also referred to as the Trading

Index, or the TRIN. It is a technical indicator used to determine the condition of the financial markets. The principle behind the Arms Index is the idea that when rising stock values are accompanied by strong volume, more stocks will increase in value than will lose value.

The formula for calculating the Arms index is as follows:
1. Divide the number of advancing issues by the quantity of declining issues.
2. Divide the total advancing volume by the total of decreasing volume.
3. Divide the results of #1 by the results of #2

The resulting number indicates market condition. A value below one indicates a bullish market, and a value of greater than one indicates bearish market conditions.


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