Traders Weigh in on Prospects for Stock Market, Oil

06/10/2010 12:01 am EST

Focus: STRATEGIES

Tim Bourquin

Co-Founder, The Traders Expo and The Futures & Forex Expo

The results are in for MoneyShow.com’s latest trader sentiment survey. As the Los Angeles Traders Expo begins today in Pasadena, California, MoneyShow.com has once again asked traders to share their views on the price of key markets and whether they will rise or fall for the remainder of the year.

Three times per year, MoneyShow.com surveys traders to determine their overall sentiment. The first question about the direction of the S&P 500 index resulted in the bearish sentiment being more popular. While 39% of traders surveyed felt the S&P 500 would rise through the remainder of 2010, over 42% felt it would be lower by the end of the year.
 
Question: Between Now and December 31, 2010, I think the Standard & Poor's 500 Average Will:


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When asked about the value of the US dollar in relation to other currencies, over 50% felt dollar would gain strength. That’s been the current trend over the past few months and is in stark contrast to the survey results from February, when over 60% of traders surveyed felt the USD would fall in value through the rest of the year. That first survey of the year was before the European debt crisis and Greek bailout issue were presented.

Question: For the Remainder of 2010, I Expect the US Dollar, in Relation to Other Currencies, to:


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Traders also continue to be bullish on gold, with over 60% of respondents stating that the safety commodity and inflation hedge would rise over the coming months.

Question: From Now Until December 31, 2010, I Think the Price of Gold Will:


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NEXT: More Notable Findings from Trader Sentiment Survey

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Other notable findings from this recent trader sentiment survey were:

  • 65% of traders surveyed are somewhat or very bullish on the prospects of oil through the remainder of 2010; slightly less than when the survey was last conducted in February 2010

Question: From Now Until December 31, 2010, I Think the Price of Crude Oil Will:


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  • 33% of traders surveyed stated they would be making more trades this year than last, a significant decrease from the results in February, when 45% of traders stated they would be making more trades. This indicates a more cautious trading environment that coincides with lower volume seen lately in the markets.
  • 62% of traders surveyed believe the Federal Reserve will keep interest rates at their current level for the remainder of 2010, as seen on the pie chart below.

Question: For the Remainder of 2010, I Expect the Federal Reserve Will:


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Stocks continue to be the most popular markets to trade and also where traders feel their most profitable trades will be for the remainder of 2010.

Question: For the Remainder of 2010, I Expect That My Most Profitable Trades Will Be in:


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MORE: Sentiment Survey Results Continue on Next Page

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The results of other questions:

Question: From Now Until December 31, 2010, I Estimate the Percentage of My Trades That Will Be Short Sales Will Be:


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Question: For the Remainder of 2010, in Terms of Number of Trades, I Expect That I Will:


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Question: For 2010, I Expect My Trading Profits to Be:


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Question: For the Remainder of 2010, I Expect the Overall Economy to:


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Like much of the nation, traders are nearly evenly split on their sentiment for the overall US economy, with slightly more traders feeling the economy will be worse by year’s end.

However, most short-term traders are merely concerned about where the markets will be for the next few days, let alone where the overall economy will be by year’s end.

Overall, traders are more bullish on commodities such as oil and gold than they were in February. Traders continue to shorten their time frames for trades as uncertainty grows.

The recent oil spill disaster in the Gulf of Mexico and continuing European monetary issues that have strengthened the US dollar seem to be “top of mind” for traders everywhere.

These issues will certainly be hot topics at the workshops, receptions, and hallway discussions that will be happening at the LA Traders Expo this week.

By Tim Bourquin, trading content director, MoneyShow.com and co-founder of The Traders Expo

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