Results of the latest MoneyShow.com Trader Sentiment Indicator were officially announced at the New York Traders Expo on Saturday, February 16. Short-term traders are leaning toward a bullish sentiment for the S&P 500 for the remainder of 2008.  From a survey sent to active traders by MoneyShow.com, 48% of the respondents were bullish on the prospects of the markets for the rest of the year.  Traders tend to be more optimistic group by nature, and even with uncertainty in the markets from a weak dollar and the sub-prime lending crisis, nearly half of the survey respondents feel the markets will rise in the coming months.

Just how much the chart shows an upward trend, however, is an issue.  Most bullish traders seem cautiously optimistic: 30% of the respondents felt the S&P 500 will rise less than 10% for the remainder of the year. 18% were very bullish and stated that the S&P would rise 10% or more.

Falling in line with the bears, 34% of the traders stated the S&P 500 index would fall for the rest of 2008.  18% are neutral and feel the markets will remain in a trading range for the bulk of the year.

In contrast to the results from a November 2007 survey, slightly more traders are bullish on the markets now than they were near the end of last year.

The number of traders shorting the market remained nearly equal to the results from the November 2007 survey.  22% of the traders say they won't be shorting any markets to make profits.  However, 25% stated that up to half of their trades would be on the short side of the markets for the remainder of the year.

When asked about how they felt the Federal Reserve would act over the coming months, an overwhelming 85% felt the Fed would ease rates at least once or twice during the year.  Given this number, one might think traders would be more bullish on the market prospects. However, it may indicate their lack of faith in the Fed's ability to move the markets as they have done in the past.

When traders where asked which securities they felt would deliver their most profitable trades, stocks and options accounted for more than half, while commodities and foreign currency (forex) also had strong showings. In contrast to the November 2007 survey, foreign currency trades accounted for 5% less, perhaps because of uncertainty in the US dollar.  Fewer traders seem to think their trades on the currencies will result in positive returns. Commodity trades, however, jumped by 5%, possibly indicating traders' bullish sentiment on gold and energy.

Finally, when asked what their expectation of the value of the US dollar was in relation to other currencies, traders continue to see a decline, with over 56% of the respondents saying the dollar will fall "moderately to significantly" over the remainder of 2008.  Since clearly most traders are not shorting markets consistently, it makes the drop in the number of profitable forex trades they are expecting more understandable.

While most traders are interested in what is going to happen in the next several hours or days, rather than months, the MoneyShow.com Trader Sentiment Indicator shows that opinions about market direction can vary significantly.  Traders will continue to watch the very short-term movements while keeping an eye on the overall trend.