THE THEORY OF CONTRARY OPINION: A TEST USING SENTIMENT INDICES IN FUTURES MARKETS

Dwight R. Sanders, Scott Irwin and Raymond M. Leuthold

Journal of Agribusiness, 2003, vol. 21, issue 01, 26

Abstract: The theory of contrary opinion predicts price reversals following extremes in market sentiment. This research tests a survey-based sentiment index's usefulness as a contrary indicator across 28 U.S. futures markets. Using rigorous time-series tests, the sentiment index displays only a sporadic and marginal ability to predict returns, and in those instances the pattern is one of return continuation--not reversals. Therefore, futures traders who rely solely upon sentiment indices as contrary indicators may be misguided.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://ageconsearch.umn.edu/record/14673/files/21010039.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:jloagb:14673

DOI: 10.22004/ag.econ.14673

Access Statistics for this article

More articles in Journal of Agribusiness from Agricultural Economics Association of Georgia Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().