Stock Market Sentiment Analysis: Sell Euphoria & Reap Rewards

stock market sentiment analysis

Stock Market Sentiment Analysis: Euphoria Decoded for Market Peaks

Updated Feb 2023

Even though things are viewed as bad now, these times will be viewed as the good old days in the not-too-distant future. We also expect the polarisation mega-trend to gather even more traction. Most importantly, the Market of Disorder will move into the second phase.

In this phase, things will appear even more disorderly, at least to the masses and experts of yesteryear. Expect many well-known and renowned experts to stumble and make fools of themselves as their predictions fail to materialise.

We believe that the markets are setting up for a substantial correction next year. Almost every asset class except for precious metals has soared in value. A strong stock market correction could lead to secondary effects, such as cooling the steaming hot housing market. Market Update Nov 11, 2022

Federal Influence Unraveled: Mastering Stock Market Sentiment Analysis

The Fed need an “oops, I did it again Britney Spears moment so they can renege on their promise to taper. Hence, the Fed is likely to engineer a substantial correction. Nothing shocks the crowd more than when their pie-in-the-sky dreams are shattered. This will address the labour shortage problem in one shot, and the Fed will have a valid reason to default on its promise to taper. Market tops provide central bankers with an almost 100% chance of reneging on their old promises. More importantly, market sentiment will turn bearish, providing the impetus for the next bull run. 

The Fed’s mission is to keep printing money forever. We are in the forever QE mode. They will use all sorts of tricks to achieve this. One will be via the IRS, where monthly checks are sent out to help families meet their daily expenses. This is already underway.

Eventually, this will morph into universal income, which, believe it or not, will be the ultimate QE. Ultimate because most individuals will never consider that free handouts equate to QE. The Fed’s goal is to debase a given currency. Handing money is a nifty way of achieving this objective while pretending to help the needy.

 

 

Epochal Stock Market Sentiment Analysis

Market Tops tend to occur when Bearish sentiment is trading in extremely low ranges.

table of market tops values

anxiety index bnb index

 

For the first time this year, we have three back-to-back readings where bullish sentiment is trading above its historical average. The first strong confirmation is that the markets will put in a multi-week top next year. Market Update Nov 11, 2021

The Fed needs a solid correction to scare the living daylights out of the masses. When panic sets in, the mass mindset is open to any and all suggestions, even if they are detrimental to the individual’s health in the long term. Many good men have tried to argue and prove that the masses can be saved, but thousands of years later, the masses are still cannon fodder.

They do what they excel at, running instead of strolling and strolling when they should be running. In other words, the secret desire to lose syndrome is so strong that they go out of their way to destroy any chance of achieving long-term success.

Signs to watch for that the market will top next year

The first sign that a top is in place is that a series of lower highs follow a new bliss. The market lacks the oomph to take out its old highs. In some instances, it comes dangerously close to doing so. This provides the latecomers to the party with enough fodder to create the illusion that the market is building steam for a higher move. These lower highs lead to a “channel formation”. Channel formations are very bullish if they form after the markets have sold off or are trading in the oversold ranges. The opposite applies when they take shape in a highly overbought market.

One of the more apparent signs of a top is that bullish readings remain unusually high during this sideways action. The dumb money is sure that this sideways action represents another buy-the-dip opportunity. However, they fail to take note of the unusually high bullish sentiment. An offshoot is that bullish sentiment trades slightly above its historical value, but Neutral sentiment surges. When the market is trending sideways, either development indicates that a top is in place.

 

Other Articles of Interest

Factors Behind the Stock Market Crash and the Great Depression

Unveiling the Catalysts: A Refined Compendium of Factors Behind the Stock Market Crash and the Great Depression

March 28, 2024 Few events in financial history have been dissected as thoroughly as the stock market crash of 1929 ...

Contrarian Thinking: The Power of Challenging the Status Quo

Success Uncorked: The Marvels of Contrarian Thinking March 25, 2024 Welcome to a fresh perspective on success, where we uncork ...
Silver market manipulation

Shimmering Deceit: Unveiling the Elegance of Silver Market Manipulation

Mar 21, 2024 With its allure of timeless value, the precious metals market has always captivated investors, traders, and even ...
Financial Freedom Book: A Pinch of Salt, a Splash of Whiskey

Financial Freedom Book: A Pinch of Salt, a Splash of Whiskey

Financial Freedom Book: Navigating with a Pinch of Salt and a Splash of Whiskey March 20, 2024 In personal finance, ...
The Stock Market Forecast for Next 3 months: its better than you think

Stock Market Forecast for Next 3 & 6 Months

Stock Market Forecast For Next 3 Months: Projecting the Future Trends Updated March 19, 2024 Before embarking on the endeavour ...
Bank Loans & US Fin. Freedom: Confronting Predatory Lending

Bank Loans and Financial Freedom in USA: US Financial Liberty Under Siege

Bank Loans and Financial Freedom in USA: The Illusion of Prosperity March 18, 2024 In the United States, the pursuit ...
Yellow Journalism Examples: a story of never ending deceit

Unmasking Deceit: Examples of Yellow Journalism

Editor: Vladimir Bajic | Tactical Investor  Deceptive Tactics:  Examples of Yellow Journalism Updated March 18, 2024 In the modern era, ...
Why Covered Calls are a Bad Strategy

The Unfortunate Truth: Why Covered Calls are a Bad Strategy

March 18, 2024 Covered Calls: A Closer Look at the Strategy's Hidden Complexities Covered calls are often touted as a ...
Is Value Investing Dead or Not? Exploring Observational Angles

Is Value Investing Dead? Shifting Perspectives for Profit

 Is Value Investing Dead or Not? Tactical Investor Take March 16, 2024 Introduction The debate over the vitality of value ...
Small Dogs Of the Dow

Unleashing the Power of Small Dogs Of the Dow

Small But Mighty: Investing in Small Dow Dogs Updated March 15, 2024 In the stock market, where each move is ...
The Importance of Keeping an investment journal

Investment Journal: Charting the Course Toward Financial Triumph

Investment Journal: The Road to Financial Success updated March 14, 2024 Introduction: The Stoic Investor In the words of the ...
 The Power and Influence of Mob Mentality

Unraveling the Enigma: The Dark Allure of Mob Mentality

Mob Mentality Unleashed: Deciphering Group Power! Updated March 13 2024 Have you ever been sucked into a collective mentality that ...
Trading Success- From Riches to Rags

Trading Success: From Riches to Rags and the Rise to Wealth Mogul

Mar 13, 2024 Trading Success: From Rags to Riches or the Brink of Poverty Riches come to those who seek ...
Dow theory Forecasts: The alternative

Dow theory Forecasts: Alternative could be better

The Accurate Alternative to Dow Theory Forecasts Updated March 2024 Introduction  History remains an invaluable teacher, and as the saying ...
The Contrarian Outlook - Unleashing Success

Contrarian Outlook: A Pathway to Breakthrough or Breakdown

Contrarian Outlook: Balancing the Scale of Success and Risk Updated March 11, 20234 Introduction Adopting a Contrarian Outlook could be ...