Chart of the Day - Tuesday, February 25th, 2020

Today’s Chart of the Day was shared on Twitter by Wolfe Research (@WolfeDailyHowl). It's a chart of the TRIN index over the past year. The Trading Index (TRIN) or Arms Index is an indicator used to gauge market internals in the short-term. Put simply, "When the TRIN is high, it's time to buy. When the TRIN is low, it's time to go." When the index spikes, it tells us that market participants have thrown in the towel or capitulated and that a short-term bottom may be in. Wolfe Research points out that the current reading on the TRIN is still relatively low, despite the sharp sell-off we've seen over the past few sessions. This suggests that we still haven't gotten a total washout in complacency and that stocks could fall further in the short-term before finding a bottom.