FTSE Analysis:
- The FTSE started the week lower as energy and mining stocks decline on softer commodity prices
- FTSE continues to trade near the middle of the broad channel in search of directional clues – UK inflation data on Wednesday
- IG Client Sentiment provides a bearish bias as traders increase longs, exit shorts
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FTSE 4 hour chart
Chart prepared by Richard Snow, IG
Contrarian Indicator Hints at Lower FTSE Move
FTSE 100: Retail trader data shows 67.34% of traders are net-long with the ratio of traders long to short at 2.06 to 1.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests FTSE 100 prices may continue to fall.
The number of traders net-long is 1.60% higher than yesterday and 12.32% higher from last week, while the number of traders net-short is 0.09% lower than yesterday and 9.82% lower from last week.
Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger FTSE 100-bearish contrarian trading bias.
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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