[vi] Indicative charts to show market direction

There are a few useful indicators that not only option traders but also stock investors may utilize to anticipate the market direction of the day. Here are some of them:-

 TRIN or Short-Term TRading INdex; the Arms Index is a breadth indicator to identify short-term overbought or oversold situations. This applies to NYSE counters and a number of over 1.0 means bearish. On the other hand, a number less than one means bullish.

VIX is the ticker symbol for the Chicago Board Options Exchange Market Volatility Index, a popular measure of the implied volatility of S&P 500 index (or CBOE Volatility). Its average is about 20 and a higher number means too much fear in the market or bearish.

There is also a TRINQ, the Arms index for NASDAQ. Similar to TRIN above, a number greater than one means bearish.

I usually set up 7 charts in one page:-

1. TRIN 
2. TRINQ
3. VIX
4. S&P500 INDEX
5. NASDAQ COMPOSITE INDEX
6. EURO DOLLAR INDEX
7. US DOLLAR INDEX

copy this link

http://stockcharts.com/freecharts/candleglance.html?$SPX,$COMPQ,$VIX,$TRIN,$TRINQ,$XEU,$usd|B 

After 10:00 (EST), the indices should give a guide to you whether the market is overall bullish or bearish. You can enter your trades or check out your stops accordingly. For residents in Asia especially HK, Singapore or Malaysia, check it out after 10:00PM local time.

e.g. 

US market bearish --> TRIN = 2, TRINQ = 2, VIX = 30

US market bullish --> TRIN = 0.5, TRINQ = 0.5, VIX = 15

P/S: Stockcharts.com provide free education on chart patterns and many commonly used indicators. However, try to make things simple in your trading. Too many do not lead to great success but confusion instead.