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I think you would get much more accurate readings on sentiment looking at a
combination of TRIN, VIX (volitility extremes), and Marc Chaikin's money
flow indicator.
Related Recommended reading:
TRIN -- S&C Magazine, September 1999, pp.65-66
VIX -- Futures Magazine, July 1999, vol 28, nbr 7, pp.36-37
Marc Chaikin's Money Flow Indicator (aka Volume Accumulation Indicator) --
The Encyclopedia of Technical Market Indicators, pp. 515-516
Example of use within a trading system -- S&C Magazine,
October 1999, pp 66-67
I would imagine that the followers of a technical trading mailing list
would be more sophisticated traders than the likes of your "Abbey Joseph
Cohens" who are the ones replying to the analyst sentiment surveys. Fading
the sentiment of these dingalings probably could be the core of a highly
successful trading system, I wouldn't imagine the results would be as good
with a sample population from this list. IMHO. Some of the bears on this
list may not be short, maybe just in cash or other short term instruments,
whereas the investment managers (and I use the term loosely) are likely to
the gills long if they are bullish.
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At 01:00 AM 10/6/99 EDT, Howard Hopkins wrote:
>I'm definitely for this if we can figure anyway to compile a sentiment
>indicator for each market. Maybe on a weekly basis? Any of you computer
>gurus know how we can do this?
>
>HHH
>
>
>>From: "Kohath" <kohath@xxxxxxxxxxxxx>
>>Reply-To: "Kohath" <kohath@xxxxxxxxxxxxx>
>>To: <ggautier@xxxxxxxxxxx>, "RealTraders Discussion Group"
>><realtraders@xxxxxxxxxxxx>, "BobsKC" <bobskc@xxxxxxxxxxxx>
>>Subject: Re: AW: FOMC meeting?
>>Date: Tue, 5 Oct 1999 12:43:49 -0700
>>
>>We should have a survey each day on the Bearishnesh, bullishness,
>>nuetralness of the members of this forum, compile the list, analyse it, and
>>determine if using such a list would contribute as another indicator,
>>contrarian or protarian, to help make trades. Sort of what they do on
>>CNBC.
>>I don't put much stock in the indicators they produce on CNBC, unless, of
>>course, one would use it more as a contrarian to the contrarian indicators.
>>Any for this.
>>Matt
>>
>>----- Original Message -----
>>From: BobsKC
>>To: ggautier@xxxxxxxxxxx ; RealTraders Discussion Group
>>Sent: Tuesday, October 05, 1999 10:07 AM
>>Subject: Re: AW: FOMC meeting?
>>
>>
>>Ahhh.... The wall of worry! We climb it while screaming armagedden over
>>and over and over and still, we do it. In fact, we *must* do it or bull
>>markets would fail. The mails to this list proclaiming bubbles, (aka bull
>>markets), are about to burst, only substantiate that the climb up the wall
>>is continuing. Should nearly everyone on this list begin to proclaim we
>>are past the problems, that the bubble was really a hot air balloon to
>>prosperity and that the indices have only begun to rise.... *get out*.
>>
>>Oh, I too am not so sure we won't see an increase of 1/4 pt today with a
>>neutral bias. Almost as good as no increase since everyone will then be
>>convinced the series has ended. Without an increase, worrywarts will just
>>begin to worry about Nov. For me, I would like to see the final 1/4 point
>>taken back and a return to focusing on earnings.
>>
>>Bob
>>
>>At 05:20 PM 10/5/99 +0100, Gwenael Gautier wrote:
>> >Ouch that hurts... Well I hope this is not to happen. Problem with
>>bubbles
>>is
>> >that they are recognized as obvious bubbles only after the fact. There
>>are
>>many
>> >situations that are comparable to bubbles but which never burst so they
>>are not
>> >recognized as bubbles.It was said before 1987 we are in a bubble, and we
>>had a
>> >crash and the bull we had after just dwarfed the previous, so where is
>>the
>>true
>> >bubble?
>> >
>> >still bubbling,
>> >
>> >Gwenn
>> >
>> >
>> >
>> >| -----Ursprungliche Nachricht-----
>> >| Von: Earl Adamy [SMTP:eadamy@xxxxxxxxxx]
>> >| Gesendet am: Tuesday, October 05, 1999 1:32 PM
>> >| An: RealTraders Discussion Group
>> >| Betreff: Re: FOMC meeting?
>> >|
>> >| AG is responsible for guiding the monetary and interest rate policies
>>of
>>the
>> >| US and this includes managing and preventing excessive speculation and
>> >| consumption whether it be in banking, real estate, credit, or stock
>>markets.
>> >| Allowing bubbles to build and then explode wrecks the economy for
>>everyone,
>> >| not just the irresponsible speculators - clearly an area where
>>government
>> >| has a responsibility to act. Early in his career, AG wrote some papers
>>on
>> >| the crash of 29 which criticized the central bankers for allowing
>>excessive
>> >| speculation and credit to grow unabated. Just a few years ago, AG had
>>it
>> >| right when he spoke of "irrational exuberance", however he was
>>unwilling
>>to
>> >| pay the (probably very substantial) political price of raising interest
>>and
>> >| margin rates to head off the bubble. Nor have our central bankers and
>> >| politicians been willing to bring an end to the import of endless cheap
>> >| goods which have held inflation in check and spurred consumption while
>> >| exporting a major portion of the US manufacturing base and building an
>> >| incredible trade deficit. Consequently, by most historical measures, US
>> >| equity and credit markets have bubbled to the point where a prick of
>>the
>> >| bubble poses a serious threat to not only the US economy, but the world
>> >| economy as well.
>> >|
>> >| When the bubble does burst, as it inevitably will, the retirement
>>savings
>> >| and pension plans of at least two generations will be placed in
>>jeopardy.
>> >| Not only are these generations at risk of losing their financial
>> >| independence, but government tax coffers shorn of the stock market tax
>> >| bonanza will be incapable of providing a safety net. Further, US
>>workers
>> >| will wake up to find that few are in a position to support the huge US
>> >| service economy and that there are few manufacturing jobs remaining. In
>> >| short, what happened in Japan in 1989 won't begin to compare to what
>>will
>> >| happen in the US when the bubble bursts.
>> >|
>> >| Earl
>> >|
>> >| ----- Original Message -----
>> >| From: Gwenael Gautier <ggautier@xxxxxxxxxxx>
>> >| To: 'James Taylor' <jptaylor@xxxxxxxxxxxxxxx>; RealTraders Discussion
>>Group
>> >| <realtraders@xxxxxxxxxxxx>
>> >| Sent: Tuesday, October 05, 1999 2:05 AM
>> >| Subject: AW: FOMC meeting?
>> >|
>> >|
>> >| > People make their own decisions and choices. Whether Mr G. was right
>>or
>> >| wrong
>> >| > to make the decisions he made remains to be seen in hindsight, but it
>>is
>> >| people
>> >| > who acted on their own buying these stocks, working for these
>>companies
>> >| that
>> >| > lay off, did not start their own companies, did not buy the stocks,
>> >| speculated
>> >| > short term instead of holding long term, or bought houses and cars
>>instead
>> >| of
>> >| > stocks, or the reverse, borrowed instead of saved. How can you say G.
>>is
>> >| > responsible for what people do. As you mentionned most are
>>irrational,
>>and
>> >| do
>> >| > irrational things and then complain about unexpected results... Well,
>>you
>> >| bet!
>> >| > That shouldn't be a surprise, but I don't see what G. is doing in
>>there.
>> >| >
>> >| > Gwenn
>> >| >
>> >| >
>> >| >
>> >| > | -----Ursprungliche Nachricht-----
>> >| > | Von: James Taylor [SMTP:jptaylor@xxxxxxxxxxxxxxx]
>> >| > | Gesendet am: Tuesday, October 05, 1999 4:06 AM
>> >| > | An: RAY RAFFURTY; fritz@xxxxxxxx; RealTraders Discussion Group
>> >| > | Betreff: Re: FOMC meeting?
>> >| > |
>> >| > | If the scum-sucker Greenspan has any spine at all, he will raise
>> >| tomorrow,
>> >| > | and catch the gambling public flat-footed. This 'man' (and I use
>>the
>> >| term
>> >| > | loosely) will be hated by tens of millions of American's when this
>>ponzi
>> >| > | scheme finally ends. A heck of a lot of innocent, hard-working
>>citizens
>> >| > | will be hurt by his past bubble cultivation. When the blind-sided
>> >| public
>> >| > | end up unemployed, their families put on the street, and hungry,
>>this
>> >| joker
>> >| > | will think long and hard about the choices he made. I wouldn't
>>want
>>to
>> >| be
>> >| > | him. Rednecks don't act rationally when they are hungry and cold.
>> >| > |
>> >| > | Signed,
>> >| > | an informed student of economics and government mismanagement and
>> >| deception
>> >| > |
>> >| > | -------------
>> >| > |
>> >| > | At 09:42 PM 10/4/99 -0400, RAY RAFFURTY wrote:
>> >| > | >Hi Gary,
>> >| > | >
>> >| > | >Actually, to get a jump on the Fed. meeting tune into CNBC at
>>about
>> >| 8:00 AM
>> >| > | >EST for Mr. Greenspan's briefcase indicator. It has been correct
>> >| something
>> >| > | >like 18 out of the last 19 times. {;-)
>> >| > | >
>> >| > | > Good luck and good
>>trading,
>> >| > | >
>> >| > | > Ray
>>Raffurty
>> >| > | >
>> >| > | >
>> >| > | >----- Original Message -----
>> >| > | >From: Gary Fritz <fritz@xxxxxxxx>
>> >| > | >To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxx>
>> >| > | >Sent: Monday, October 04, 1999 4:34 PM
>> >| > | >Subject: FOMC meeting?
>> >| > | >
>> >| > | >
>> >| > | >> I'm holding a long position into tomorrow and I figured I'd
>>check...
>> >| > | >>
>> >| > | >> The FOMC meeting starts tommorrow morning at 0900 ET. But there
>>is
>> >| > | >> usually not any impact from the *start* of the meeting, right?
>>Any
>> >| > | >> fireworks, if any are to happen, shouldn't launch until they
>>announce
>> >| > | >> on Thursday at 1400 ET?
>> >| > | >>
>> >| > | >> The market doesn't seem to think Mr. G. will drop any bombs on
>> >| > | >> Thursday, given the run-up since Friday afternoon. Anybody want
>>to
>> >| > | >> hazard any predictions?
>> >| > | >>
>> >| > | >> Thanks,
>> >| > | >> Gary
>> >| > | >>
>> >| > | >>
>> >| > | >>
>> >| > | >
>> >| > | >
>> >| > | >
>> >|
>> >
>>
>
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