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How to define market sentiment?

  • #21
  • Dec 12, 2011 3:24pm Dec 12, 2011 3:24pm
I don't want to over-complicate it, but this is a good link, worth keeping an eye on during the day. Oil and copper are good indicators of risk, rising prices is usually risk off, falling prices is usually risk on.

http://finviz.com/futures.ashx

Also bond prices are important, particularly treasuries (t-bills), falling prices is usually risk off, and vice versa. these are shown in above link.

As mentioned by others keep an eye on equities, particularly the S&P 500. Also in currencies, AudJpy is a good one to watch.

Its best to look at a broad range of indicators because each one can be affected by things unrelated to risk appetite, ie oil prices can also be influenced by supply disruptions.

Hope I haven't muddied the water! Good Luck.
  • #22
  • Dec 12, 2011 6:22pm Dec 12, 2011 6:22pm
Quoting gsantri
Here's another example of 'risk on / risk appetite / us dollar bearish' when us data came out positive on last Friday..

http://www.forexfactory.com/showthre...65#post5211465
hey, it's a very good example btw. thanks for the explanation.

Quoting -nate-dogg-
I don't want to over-complicate it, but this is a good link, worth keeping an eye on during the day. Oil and copper are good indicators of risk, rising prices is usually risk off, falling prices is usually risk on.

http://finviz.com/futures.ashx

Also bond prices are important, particularly treasuries (t-bills), falling prices is usually risk off, and vice versa. these are shown in above link.

As mentioned by others keep an eye on equities, particularly the S&P 500. Also in currencies, AudJpy is a good one to watch.

Its best...
Hi nate! Thanks for the link! Are gold and silver also good indicators risk?
Be the market
  • #23
  • Dec 13, 2011 7:05am Dec 13, 2011 7:05am
Quoting alvseek
Hi nate! Thanks for the link! Are gold and silver also good indicators risk?
Silver has industrial uses as well as being used as an asset, so not so much.

Gold is traditionally considered a safe haven and inflation hedge. This can be a risk indicator in acutely uncertain times. However it tends to move inversely to the dollar (as it's priced in dollars).

I personallly don't use either at this moment in time, but this may change in different market conditions, i.e. if the brown stuff hits the fan.

Other people may have different views.
  • #24
  • Jan 4, 2012 8:54pm Jan 4, 2012 8:54pm
thanks to all
  • #25
  • Last Post: Jan 9, 2012 9:15am Jan 9, 2012 9:15am
Quoting alvseek
Hello traders,

I'm still learning about this market sentiment thing and i need help from experienced traders like you.

It's been 2 weeks I've tried to define the market sentiment, but i found some difficulties. I want to ask something:

If there are good news for both of the side, will it makes the sentiment neutral?
I think the answer of this question is depend on what news it has because it maybe having different impact, right? But then How can we say it that it have different level impact (ex. a news is considered having more impact that the...

When it comes to fundamental news, you cannot point out how the market should react to each event. I think, as you said, that it is depended on the importance of the news (for example NFP is much important than the ISM) and the expectations that the markets have from the data. The more the expectations are higher, the more are the chance for disappointment and a negative reaction. However, sometimes there is a flood of disappointing data and yet the market reacts with a positive sentiment. The bottom line is that you cannot put this in a specific formula that will tell you the market's sentiment.

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