|  SEP 1989

Volume indices by Arthur Merrill

Volume indices by Arthur Merrill The ARMS Index, in the years since Richard Arms Jr. originated and described it in the August 7, 1967 issue of Barron's, has been called MKDS by Bunker Ramo, STKS by ADP, TRIN by Quotron and the Short Term Trading Index. Market technicians, however, recommend the name ARMS Index. The index has a simple formula: ... If declining stocks are more active than advancing stocks, the index will be high and the indication bearish (Figure 1). If advancing stocks are showing the most volume, the index will be low and N the indications bullish. However, analyst John McGinley, editor of Technical Trends, has an interesting angle. When the index reaches excessive values, he uses it as a reverse indicator because it couldn't go much further.

by Arthur A. Merrill, C.M.T.