While it may seem like traders have been starting to worry about the recent stock sell-off, one key indicator suggests they need to get even more nervous before the market can truly bottom out. That indicator is called the Arms Index (known as "TRIN" for short), and it compares advancing and declining stock issues and trading volume as an indicator of market sentiment. When the TRIN climbs above 2, that's viewed as exceeding the threshold for indiscriminate selling. The TRIN has stayed below 2 this month, failing to surpass the threshold that Strategas considers a sign of indiscriminate selling. This indicator basically says that investors need to get even more panicked before the market can truly bottom out in a complete crash.

The TRIN is considered "snake oil" by some, according to Bloomberg.