Yesterday, I posted a chart with no names or numbers – if you haven’t already seen it, click here before you read further. you were asked to answer three questions:
1) Is this security a buy or a sell?
2) Which security is it?
3) Are the 88% buyers or sellers?
It was great to read everyone’s views – and many thanks to all who contributed.
The answers are:
1) Up to individual traders to decide. I’m bearish on a fundamental view, but agree with those who pointed out that the chart displays encouraging signs for both bulls and bears, or is at least neutral.
2) GOLD in US dollars. Other suggestions included silver, copper, AUD/USD, EUR/USD, BHP, Rio. Congratulations to those who identified it correctly. My favourite came from Iain, and reflected the traders’ journey:
“It is a chart of my confidence in trading shares. Initially, a few decent trades inflated my confidence way past my knowledge base. Upon learning more, only then did I realise how little I knew. At this point I started second guessing myself and as a consequence traded sideways. I expect to flatline sometime soon. I am currently thinking about buying which would suggest that 88% of others will do the opposite.”
3) 88% of CMC accounts with a position in gold are LONG. Here’s a screenshot:
(This is the new Client Sentiment indicator – as you can see above, you’ll find it in the same window as the charts and other security information, on the “Overview” tab).
This positioning was the inspiration for the post. I’m not sure why so many are bullish on gold – and the majority who guessed that 88% are short may agree.
The most complete and accurate answers came from jpietersz, Leo, william small, Ephraim Sella and the Captain. Congratulations to all the winners, and thanks again to all who participated.