I hope the chart says it all. The index of net position is calculated on a 26 weeks look back period. it ranks the current net position on a scale of 0-100% with in the last 26 weeks. A reading below 50% represents a bearish zone while above 50% represents a bullish zone. The index can also help identify extreme levels. 0-20% represents a bearish extreme while 80-100% represents a bullish extreme. Extreme levels suggests that price may turn soon.
in this scenario, we notice a divergence in the index between the Hedge funds and the Retail traders. This provides the incentive to move price against the retail traders who usually react to chart movements. The hedge fund may eventually move price down but there's still room for one more push to the upside to previous month's high at 1611 levels. The sell orders of retail traders may have been triggered on Tuesday. This presents the perfect set up for stop hunts.
"Most traders focus on the charts instead of the buying and selling of the people who move the charts."
in this scenario, we notice a divergence in the index between the Hedge funds and the Retail traders. This provides the incentive to move price against the retail traders who usually react to chart movements. The hedge fund may eventually move price down but there's still room for one more push to the upside to previous month's high at 1611 levels. The sell orders of retail traders may have been triggered on Tuesday. This presents the perfect set up for stop hunts.
"Most traders focus on the charts instead of the buying and selling of the people who move the charts."
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"Most traders focus on the charts instead of the buying and selling of the people who move the charts."- Larry Williams