Stocks & Commodities V. 35:04 (8–10, 20): Discounting Sentiment In The Euro by Philipe Saroyan

Discounting Sentiment In The Euro by Philipe Saroyan

Excess returns from trading sentiment are only seen in the short run … or are they? Here’s a look at a sentiment trading tactic using a contrarian, indirect sentiment indicator applied to the euro ETF that shows how over the long term, you can use a sentiment trading strategy.

Sentiment can have an impact on the markets, directly and indirectly. This is the reason why sentiment indicators are differentiated between two categories, direct and indirect. In this article, I will look at the closed-end-fund discount indicator, which is an indirect sentiment indicator similar to the traditional put-call ratio and other modified put-call ratios such as the options sentiment indicator (OSI), which I described in an article in this magazine in the November 2016 issue ...