To ignore the context of the opinion--i.e. the opinion of active traders, is to bring an intellectually dishonest opinion to the analysis. If they're Bullish, we tend to see a rally, at least early in the day. If it fades late, we shouldn't care because the pollees don't care. They're TRADERS. Many are gone and looking for the next trade.
Now, if you can't make money being almost immediately right 60% of the time, then you probably shouldn't be a trader. :D More seriously, though, the opinion poll is just one piece of the puzzle and not that important of a piece (sometimes the moves are too small and the opinion too mercurial), just one that I find interesting and surprising (that the FF's tend to be right). The Actual Position polls are more valuable, I think, for more important trend analysis, but I'd still not rely overmuch on that one alone. It's just nice and sensitive.
I'll also look at my proprietary surveys, my Rydex Speculation Oscillator, ISEE, $-weighted OEX P/C, and the rest of the common money-based sentiment indicators.
Regardless, I make my living as well as good returns using this stuff (my ST sentiment signals are running 14 out of 15 winners since we started tracking the trades in the emini), so don't pay any attention to me. ;)
Mark Young
WallStSentiment.com |
