Market Sentiment

Market sentiment is the general view of investors towards the market. This is the combined view of all investors at any one time. Since this is not static but always changing, market sentiment is usually seen in three general categories: extremely optimistic (bullish); extremely pessimistic (bearish); and neutral or equal in number of optimists and pessimists. The view of market participants can be based on either fundamental or technical reasons. Market sentiment is seen as moving the main indices, which will push individual stocks in its wake. For example, a company might not be a great stock, but if the market sentiment for the overall index is extremely bullish, this optimism will push up the price of most if not all stocks. Many view extreme market sentiment readings as a contrary indicator, when most people are bullish (optimistic), this is close to a short-term top and vice versa.


Ever since the financial crisis several years ago, market sentiment has been quite negative on bank stocks. While the initial pessimism was well warranted, bank stocks today are radically different than they were in 2008. Clearly, from the massive gains…

No one can deny that Apple Inc. (NASDAQ/AAPL) has had an extraordinary run. Both the company itself and the stock have been the clear leaders among technology stocks. This has led to the current market sentiment, which is overtly bullish.…

When it comes to bank stocks, it seems that JPMorgan Chase & Co. (NYSE/JPM) is Public Enemy Number One. It’s unfortunate that so many retail investors have such a negative market sentiment towards JPMorgan since it has the potential for…

On a lot of occasions, the stock market sells off on the reality of its expectations, but it hasn’t since the Federal Reserve announced a third round of quantitative easing (QE3). The main stock market indices are holding up very…

There are few technology stocks that have encountered sharp decline in market sentiment quicker than Zynga Inc. (NASDAQ/ZNGA). Technology stocks in the social media space have had a bumpy ride lately. Market sentiment continues to plummet, as the initial rush…

An embarrassing turn of events continues to unfold after the recent initial public offering (IPO) of Facebook Inc. (NASDAQ/FB). Talk about a roller coaster of market sentiment changes. Prior to the IPO, it seemed as if everyone wanted a piece…

The recent ruling in the patent lawsuit in favor of Apple Inc. (NASDAQ/AAPL) against Samsung Electronics Co. Ltd. (KRX/005930) is seen by some as a big blow to Samsung. Many looking at technology stocks are looking at jumping aboard Apple…

While there are still many pockets of weakness in the housing market, there are now some positives beginning to emerge. Market sentiment for the broad U.S. housing market will most likely stay muted, due to the millions of homes left…

With the recent string of weak economic data worldwide, one would think that the market sentiment for oil prices would be negative. Even the International Energy Agency (IEA) is expecting lower demand for oil next year due to weaker worldwide…

With all of the negative market sentiment in the markets and in the newspapers every day, one index that has bucked the trend is the S&P 500. The S&P 500 has been an extremely strong performer so far this year.…

Technology stocks have had a bumpy ride lately, but none more so than some of the new initial public offerings (IPOs). Some of these technology stocks have had a huge 52 week range, such as Groupon, Inc. (NASDAQ/GRPN) with its…

The recent sale of Edvard Munch’s “The Scream” for almost $120 million is a clear indication of the market sentiment regarding hard assets. The sale took place at Sotheby’s Holding, Inc. (NYSE/BID) auction house, one of a few firms whose…

With the election looming over the economy, more industries are being tormented by inaction and political bickering. The market sentiment is becoming increasingly frustrated due to the lack of a stable regulatory environment. This instability makes it very difficult to…

There is no doubt that Caterpillar Inc. (NYSE/CAT) has had a tremendous run since the fall. From a low of $67.54 in October to a recent high just over $116.00, the market sentiment has turned completely around. There are very…

While January was one of the best months for stocks, the upward advance has been stalling, which shouldn’t be a surprise given the rapid move and the reality that the rate of gains cannot be maintained without periodic market adjustments.…

The overall market, as represented by the S&P 500, has had a tremendous run from the October lows. Even through all of the never-ending struggles with the European crisis, unemployment still high, and a slowing world economy, the S&P 500…

With February in the books, the stock rally over the first two months of the year and especially in January has been more substantial than I expected. I was thinking of 1,400 for the S&P 500 if everything worked out,…

Over the past two months, a combination of supportive policy actions and stronger economic data releases drove up market sentiment and buying in stocks. While stocks in Europe are stalling, it’s a different story here, as the key stock indices…

The bear market is doing an excellent job with investors’ attitude towards the stock market. We can see it in the market’s performance... So far this year, the S&P 500 has gained 4.6%—its best January start in 15 years! Market…