The Emini closed up 12.75 points at 1,493.00 on Friday. Finally, an exhaustion signal today. The TRIN Indicator Oscillator peaked at +250 on Thursday, the highest reading since 2001. Then on Friday the Oscillator turned down and gave a TRIN Indicator Exhaustion short signal ('TrinX S' label on the chart).
TRIN Indicator Exhaustion
These exhaustion signals don't happen all that often, from 9 to 12 times each year. But when they do they can be quite profitable. The average trade makes around 16 points; winning trades average 27 points. The chart below shows the TradeStation performance report.
TRIN Indicator Exhaustion Performance
The TRIN Indicator is one of my favorite market breadth measures – it usually leads the market and highlights weakness or strength before turning points. Plus it’s not price-based and so you can compliment price analysis with a non-correlated indicator.