AAII Sentiment bearish #'s came in kinda hot last week. One of the things you have to learn to do as a trader, and for me it took many years, is to evaluate data with your own slant. I'm sure that many of you don't look at the data the same way that I do, but for me they came in kinda hot.
That in and of itself is not necessarily a contrarian view; The things I pay attention to is when Bearish comes in hot or Bullish comes in very cold. Hi Bullish or very low bearish is not a good signal for me; could likely continue current trend or turn either one. That being said, when it comes it hot bearish/cold bullish, I'd say the odds are not much better than coinflip 55-60% probability that you can read it contrarian (in other words, taking a long position at the end of a week where it reads hot bearish/cold bullish), however, when these things do turn, they tend to be face rippers, so I don't ever want to get caught short when the contrarian signal works.
Yesterday RUT TRIN gave a +1 continuation count. Bottoming action on the daily; then rising action on daily; then hi distribution on big up day = +1 likely continuation of uptrend. When 80-90% of this move is over, wherever that may be, whether new hi's or lower hi's, most will be long and I will be shorting.
PS closed out that USO oil trade taken near close 4.11 - a winner but kind of a sucky trade anyway - didn't sell too much except y'day a little. I scale into positions with very wide stops. Sometimes I will close a winner without fully scaling in like the oil short above. When I'm very confident I have an edge, I will add to winners, like I did on 3/9, 3/16 RUT shorts. It's very important for me to not get caught wrongfooted with a big shot, because if I do, it's likely to be a large loser.
Good luck out there; will only be flat or long for the time being on index trades.
Edited by viccarter, 17 April 2018 - 11:36 AM.
