The Nasdaq Arms Index, a breadth-weighted volume measure, has fallen enough on Friday to suggest panic-like buying behavior. The Arms, also known as TRIN, is calculated by dividing the ratio of the number of advancing stocks to decliners by the ratio of the volume in advancing stocks to declining volume. The Arms tends to fall below 1.000 when the market rises, as the denominator increases as sellers act more aggressively than buyers. Currently on the Nasdaq exchange, advancers exceed decliners 2.20 to 1 while advancing volume exceeds declining volume 5.03 to 1, knocking the Arms down to 0.438. Many on Wall Street see Arms readings below 0.500 as depicting panic buying, which can be a contrarian indicator. The Nasdaq Composite
COMP,
+2.02%
was surging 2.2% in afternoon trading Friday, after falling 2.2% over the past 2 days. The last time the Nasdaq Arms showed panic like buying was Dec. 29, when the Nasdaq Comp. surged 2.6%, after sinking 2.7% over the previous two days. The index then fell 0.9% over the next two days.