Despite the firm selloff in the major indexes from record highs Thursday, the Arms Index, used to measure buying or selling intensity, suggests investors are in a buying mood. On big down days, the Arms tends to rise above 1.000, as the ratio of down volume to up volume rises relative to the ratio of declining stocks to rising stocks. But the NYSE Arms has slipped to 0.615 and the Nasdaq Arms is at 0.761, a sign that buyers on the dip have been more aggressive than sellers. The Nasdaq Composite Index is threatening to fall the most since August, while the Dow Jones Industrial Average and the S&P 500 are on track to fall by the most in more than two months. Those moves came as the CBOE Volatility Index , a measure of implied volatility, jumped 16% to trade at 11.35, still far below its historically average at around 19.
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