Talking Points:
• There are speculative, hedging, institutional and practical participants in financial markets
• While there are some measures of participation - surveys, COT, SSI - there is no comprehensive gauge
• Interpreting positioning measures, volume and even price itselt; we derive a better market read
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One of the more common conversations in trading circles is speculating 'who' is driving the market during particularly robust moves and trying to gauge when they will let off the gas. With definitive knowledge of what group or groups were more influential along with a general assessment of their intentions, we could significantly improve our assessment of the landscape and likely our trading performance. That said, there are few accurate measures to separate participation. There are even fewer that can effectively indicate intention. Instead, we have to use the tools available to us to come to a meaningful analysis. We have direct indicators (various investor surveys, COT positioning, SSI), complementary measures that can be used with price (volume, open interest) and even price action itself can give insight. We consider different means to shine a light on the market's participants with reference to the Dollar, EURUSD, S&P 500 and Oil in this weekend Strategy Video.
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