Regular readers will know my love of the IG index customer sentiment readings (For the uninitiated IG index is a financial bookmaker and they publish near real time customer sentiment numbers reflecting as a percentage of their customer base how people are positioned in their contracts) At first glance these offer little insight but if you know where they've come from on a 6 month basis they offer a crucial insight into "Man on the Street" positioning ... positioning which is very fadeable !!
Lets look at their Wall St contract (Dow Jones industrial average) .. Over the last 2 years this has historically traded short ... its been as high as 90/91 % short (Mid Aug Highs) as i write we sit at 63 % Short ...
At no point in the last 2 years has this sat less than 70% short for an extended period and im reading this as the perfect example of Dip buying , bears turned bulls ... The DJIA is still very much our leader lets look at the chart quickly ....
We are hovering above this very important level (18050/18100) .. A marginal new high today looks horrible with a total lack of follow through ... As i began writing this update we started a pretty sharp sell off which as has stalled at 18155/65 for the moment .... the real key here the close ... if this pushes lower again today/ tomorrow it sets up Horribly and remember we don't have the huge short base to buy the dip this time ...
Untill next time ....
As always twitter updates @contrarycalls
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