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.

Bearish Bank Stock Analyst Turns Bullish; Should You Follow?

By Friday, December 21, 2012

Bearish Bank Stock Analyst Turns BullishEver 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 in the share price of most, if not all, bank stocks, the market sentiment has shi… Read More

Don’t Trade Apple Until You Read This

By Thursday, October 18, 2012

Trade AppleNo 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. This can be dangerous for investors, when market sentiment is leaning so much in one direction… Read More

JPMorgan Set to Continue Higher in Spite of Frivolous Lawsuit

By Monday, October 8, 2012

JPMorgan Set to Continue Higher in Spite of Frivolous LawsuitWhen 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 large returns, with a dividend yield of 2.9%.

The latest cheap shot is nothing short of a publ… Read More

Is the Stock Market Where It Should Be After QE3?

By Thursday, September 20, 2012

business arrow diagramOn 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 well, consolidating more so than selling off on the news. Stock market sentiment continues to be relativ… Read More

Further Signs of Trouble for Zynga

By Wednesday, September 12, 2012

Trouble for ZyngaThere 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 into this sector by early investors now appears quite foolish.

The mark… Read More