The Speculative Sentiment Index (SSI) continues to prove to be a reliable forecasting tool in the forex market. This unique innovation of FXCM Inc. (NYSE: FXCM) reveals where FXCM’s forex trading crowd is positioned,  helps traders create powerful trading strategies, and provides traders with insight where the market might potentially move.  

 

The SSI Diary on AUD/USD - March 2011

March 15 - The SSI suddenly goes positive for a short period as the AUDUSD broke below 1.0000. It looks like short traders took their profits and exited the market. There are now more longs than shorts at FXCM. It looks like the relief rally will be short-lived. The SSI is signaling a further drop in the AUDUSD, so there could be a trading opportunity in shorting (selling) the AUDUSD. The 0.9850 support is unlikely to hold.

March 17 - The SSI is negative again (-1.31), which means there are more accounts short the AUDUSD than long. The SSI is a contrarian indicator and signals more AUDUSD gains—there could be a trading opportunity in going long (buying) the AUDUSD.

March 21 - As the AUDUSD breaks 1.00, the SSI gets more negative, signaling that AUDUSD is likely to continue rallying further. The ratio of long to short positions stand at -2.60 as nearly 72% of traders are short. It is still not too late to go long AUDUSD.

March 25 - The ratio of long to short positions in the AUDUSD stands at an extreme -8.16. Nearly 89% of traders are short. Yesterday, the ratio was at -6.50, as 87% of open positions were short. The SSI is a contrarian indicator and continues to signal more AUDUSD gains.

March 28 - Nearly 87% of traders are still short AUDUSD, so the SSI continues to signal AUDUSD gains. We may be headed back to 1.03.

March 30 - Same as yesterday, the ratio of long to short positions in the AUDUSD stands at -6.92 as nearly 87% of traders are short. The SSI is a contrarian indicator and signals more AUDUSD gains going into April. The SSI has not yet signaled for a top, despite being at record levels.