GLOBEX SENTIMENT INDEX – Tune in to emotion

GLOBEX SENTIMENT INDEX is a unique emotional analytic for futures markets and globex sessions where there is notoriously little information/data and feedback available from cash markets

The indexes show unique measures of emotion presently focused on the ES futures markets but are available for Oil, Dax, Treasury Bond, Dollar, VIX/Volatility and Previous Metals markets. These will be rolled out in the future and your feedback is key as to assessing the need, interest in these other markets.

Very Extreme emotions or mismatches of emotions are powerful setups at which to look for trade setups and provide non-latent/quick response to market shifts and opportunities but are virtually impossible to spot with traditional tools.

A big part of the process at mcm is looking at different ways to quantify market emotions and their ability to confirm and unconfirm market activity



 


GSI (globex sentiment index) builds high probability and actionable setups:

Extreme Optimism
Extreme Pessimism
Sentiment Non-confirmation at highs or lows
Bullish Excess Energy
Bearish Excess Energy

Each of these represent areas that markets are showing emotional imbalances that present opportunities to assess and look for high probability setups that are actionable and also likely to be of consequential price reactions. 

The  toolset demonstrates these capabilities during the Cash and notably the Globex session which is exceptionally useful as highly emotional influences tend to show up overnight - esp bullish influences and this is where bullish excess energy setups are exceptionally useful or bullish setups surrounding disconnections where VERY EXTREME PESSIMISM develops.

Above you can see the Fast Globex Sentiment Index which is an excellent tool for showing market participants' short-term pessimism/optimism at any given time. This can be used for trading in several ways:

  • The easiest way to look at it is that showing extreme pessimism price is getting in an area where a bounce could ensue, while if it shows extreme optimism, a correction is close. However, the signals are more a warning flag for the look-out of the reactions mentioned above rather than a "hard" call. Because there are situations where price could travel a lot further in the trend's direction when at the same time, FGSI is pegged at the lower/upper boundary.

  • Confirmed lows/highs - FGSI indicates the continuation of the trend when both Sentiment and price action make lower lows or higher highs.
  • Unconfirmed lows/highs - FGSI indicates pause/reversal when price makes a lower low (or higher high), but Sentiment makes a higher low (or lower high). These can be extremely powerful, especially when coming after a prolonged move and showing several unconfirmed lows/highs.
  • Excess Energy set-ups - FGSI indicates buyer/seller inefficiency when Sentiment moves a lot in one direction, but the price does not. These can hold, meaning the inefficient side is likely to get rolled over or fail, leading to strong reversals (e.g., if excess energy gets broken through, this can lead to an acceleration towards that side).