Sentiment indicators… can tell you the extent to which [people] are extremely optimistic or pessimistic. Well, 2021 was a year like no other. Finally, in December 2021, I put out an issue called “A Stock Market Top for the Ages.”
Was the 1,175 Point Drop in the DOW Unpredictable?
February 20, 2018 by Leave a Comment
Prior to February 5th the market had gotten a bit complacent. It had one of the longest bull runs without a significant pullback in recent memory. All that bullishness led to low volatility and made investors lazy and less vigilant. But as we’ll see in the following article by Elliott Wave International market participants should have known better. The market can’t go straight up forever, it needs periods of consolidation to shake out the “weak hands” and build a more solid foundation as it climbs.
They Don’t Ring a Bell at Market Tops (or Bottoms)
February 23, 2016 by Leave a Comment
Recently I read the following comment on a post about investing in Gold:
Isn’t buying Gold today just like buying a horse ?
It being a purely romantic move for an object with no current use.
Sure it looks pretty and it will still get you there, though slowly,
but why would anyone have it as their primary source of investment travel ?
And I got to thinking that maybe comments like that are the “Bell” that rings indicating a new buying opportunity is at hand. In response I wrote an article entitled, Where’s Gold Headed Today? At the time of the comment, Gold had just finished trading at $1050 and by the time I wrote the article, gold was trading at $1100. As of this writing gold is trading at $1220. So it appears that the commentor made it statement at the precise bottom. But then gold tends to be an “emotional” investment with crazy statements at both the bottom and top. Personally, I think these outlandish comments are more reliable if they come from the general public rather than from seasoned investors.
I remember attending a seminar for computer network professionals in early 2000 and during every break all they could talk about was how they were going to retire on their 401k stock gains which exceeded their salaries. There’s an old saying that “It’s time to sell when the bag boy at the grocery store is giving you stock tips”. Although these guys weren’t “bag boys” they certainly weren’t investing pros either.
In the following article Chris Ciovacco gives us a different perspective about market sentiment… and gives us this excellent reminder… “Sentiment, like many pieces of evidence can be helpful, but like anything else it should not be used in isolation.” ~Tim McMahon, editor
Market Sentiment Analysis: Spotting a Shift in Sentiment is Key
December 18, 2012 by
Don’t follow the crowd- By analyzing market sentiment astute traders can spot subtle shifts ahead of the crowd in order to open the floodgates to massive profits. We’ve all heard the old mantra “Buy Low, Sell High” but logically that means that we have to buy when everyone else is selling or better yet, after everyone […]
