The Daily Sentiment Index was started by Jake Bernstein in 1987 to gather the opinions of traders on all active US futures market and later in the European and Asian markets. The poll is conducted daily and all 50 markets are updated after the US market close each day.
A few rules to follow:
- The extreme zones are >80% and <20% where the probability of a top or bottom are highest
- The longer sentiment remains at an extreme level the larger and longer the reversal will likely be
- The small trader is not always wrong at turning points but they usually are wrong at extremes
- The Daily Sentiment Index can be used as a standalone timing indicator but combining it with other timing indicators increases the probability of a successful trade.
- Following the direction of the 10 day moving average is one of the better ways to position long or short
- Color Code: Solid Red Highlight = Extreme Bullishness, Solid Green Highlight = Extreme Bearishness. Blue = Midpoint.
Red & Green Un-Highlighted = Approaching Extreme Zone.
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CURRENT SENTIMENT CHARTS