Sentiment

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Introduction to Sentiment Index
Updated: Index is reported every Thursday.
Symbol Present %L / %S % COI Sgnl
Table Key
Bearish
Signal
Bullish
Signal
Mixed
Signal
%L 
Long %
 %S
Short %
% COI
Chg. Open Interest %

Euro Sticks to Key Range for Now – Here’s What We’re Watching

Quantitative analysis, algorithmic trading, and retail trader sentiment.

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Euro Sticks to Key Range for Now – Here’s What We’re Watching

Why and how do we use the SSI in trading? View our video and download the free indicator here

EURUSD – Retail FX traders remain short the Euro versus the US Dollar and have remained short since the pair traded above the $1.10 mark through late July. A contrarian view of ‘crowd’ sentiment continues to call for further EUR/USD gains.

The clear caveat is as we noted last week: “a key sticking point is that retail traders often do well in slow-moving and range-bound market conditions.” And indeed our data shows the ‘crowd’ has caught the last key turns as the Euro remains stuck in a tight trading range.

As long as the Euro continues to trade in a tight range we see little value in taking a contrarian position to retail FX traders. Our Senior Technical Strategist warns against becoming too complacent, however; this could very well prove the calm before a major EUR/USD breakout.

See next currency section: GBPUSD - British Pound Looks likely to Hold Key Support

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Contact David via Twitter at http://www.twitter.com/DRodriguezFX



US Dollar Remains a Sell versus Japanese Yen

Quantitative analysis, algorithmic trading, and retail trader sentiment.

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US Dollar Remains a Sell versus Japanese Yen

Why and how do we use the SSI in trading? View our video and download the free indicator here

USDJPY– Retail FX traders are once again aggressively net-long the US Dollar versus the Japanese Yen, and a contrarian view of ‘crowd’ sentiment points to further losses. It was just last week when we cited an abrupt shift in sentiment as a reason the USD/JPY may in fact reverse higher. That proved short-lived, however; the much larger downtrend remains intact.

We will thus remain bearish until we see more concrete signs of a Dollar turnaround versus the Japanese Yen. Recent USD price action leaves it vulnerable across the board. And recent market focus on the US Federal Reserve keeps the Greenback in limbo through the foreseeable future. All else equal, we prefer to be short USD/JPY until we see a substantive shift in USD sentiment.

See next currency section:EURUSD - Euro Outlook Remains Cautiously Bullish until this Changes

Written by David Rodriguez, Senior Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

Contact David via Twitter at http://www.twitter.com/DRodriguezFX



British Pound Looks likely to Hold Key Support

Quantitative analysis, algorithmic trading, and retail trader sentiment.

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British Pound Looks likely to Hold Key Support

Why and how do we use the SSI in trading? View our video and download the free indicator here

GBPUSD– Retail FX traders are once again net-long the British Pound versus the US Dollar, and a contrarian view of ‘crowd’ sentiment points to further weakness. Last week we admittedly said the opposite as retail FX was net-short. Yet we took a measured approach to calling for GBP gains as the pair continued to trade below key resistance.

We will similarly take a measured approach in now calling for GBP/USD weakness—watch critical Sterling support near post-Brexit lows given clear risk of a bounce. The fact remains that retail traders will broadly tend to do well in slow-moving markets, and a hold of key support would keep the Sterling in a low-volatility trading range. Only a substantive shift in market trading conditions would change our mostly-neutral GBP-trading bias.

See next currency section: SPX500 - US S&P 500 Shows Clear Risk of Turn Lower

--- Written by David Rodriguez, Senior Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

Contact David via Twitter at http://www.twitter.com/DRodriguezFX



Australian Dollar Sentiment Points to Gains

Quantitative analysis, algorithmic trading, and retail trader sentiment.

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Australian Dollar Sentiment Points to Gains

Why and how do we use the SSI in trading? View our video and download the free indicator here

AUDUSD– Retail FX traders are now net-short the Australian Dollar versus the US Dollar, and a contrarian view of ‘crowd’ sentiment leaves us in favor of buying into further AUD/USD gains. This admittedly stands in contrast to what we said a short time ago—traders were previously net-long and we called for weakness. Indeed it has been difficult to establish a long-standing trading bias given choppy AUD price action.

The US Dollar’s recent sell-off against the Euro, Japanese Yen, and other major currencies nonetheless suggests there is room for further USD weakness and AUD/USD strength.

See next currency section: S&P - US S&P 500 Remains a Buy until this Changes

--- Written by David Rodriguez, Senior Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link. Contact David via Twitter at http://www.twitter.com/DRodriguezFX



Gold Prices Suddenly Suggest it’s Time to Sell

Quantitative analysis, algorithmic trading, and retail trader sentiment.

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Gold Prices Suddenly Suggest it’s Time to Sell

Why and how do we use the SSI in trading? View our video and download the free indicator here

XAUUSD – Retail FX traders are at their most heavily net-long Gold prices in over eight months, and a contrarian view of ‘crowd’ sentiment points to further XAU/USD weakness. A further break below key support near the $1,300 mark would help confirm a larger trend turnaround. And it will be important to watch how traders respond to Gold prices at the psychologically-significant price floor.

As long as retail FX traders continue to buy, we will continue to call for Gold price weakness.

See next currency section:S&P - US S&P 500 Looks at Danger of Turnaround

--- Written by David Rodriguez, Senior Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

Contact David via Twitter at http://www.twitter.com/DRodriguezFX



US S&P 500 Shows Clear Risk of Turn Lower

Quantitative analysis, algorithmic trading, and retail trader sentiment.

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US S&P 500 Shows Clear Risk of Turn Lower

Why and how do we use the SSI in trading? View our video and download the free indicator here

US S&P 500– Retail CFD traders have significantly scaled back short positions on the SPX500, which tracks the US S&P 500. A contrarian view of ‘crowd’ sentiment warns stocks may be at a major turning point.

It was only last week when many of the same traders were at their most net-short SPX500 on record—a massive 91 percent of all open positions were short. The number of long positions has more than doubled in the past seven days while shorts have fallen 32 percent. The end result is that the ratio of open short to long positions has fallen from 10:1 to 3.3:1 in the same stretch.

It is important to note that it is early yet to call for the long-awaited turn lower—we would ideally see traders turn net-long the SPX500 before calling for larger declines. Yet it is clear that S&P 500 traders should proceed with caution given the risk of a substantial sentiment turnaround.

See next currency section: EURUSD - Euro Sticks to Key Range for Now – Here’s What We’re Watching

--- Written by David Rodriguez, Senior Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

Contact David via Twitter at http://www.twitter.com/DRodriguezFX



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