Sentiment indicator

One of the best indicators is sentiment. The market does the opposite of what the sentiment is. In late December of 2021, the sentiment was bullish. Now it seems very bearish. Does anyone think that could mean we have a good year in the market?


Yes, it COULD mean that but there’s no way to tell. Even after the fact, if the market does have a good year, you can’t know if this month’s “pivot to bearish” is the cause of it. You always have to let these things play out. If everybody’s bearish it usually means more down or at least delay of recovery. Bearish people don’t invest. Same the other way when everybody’s bullish. If you sold the minute some survey says “Geez, things are looking really bullish” you’d miss years of returns. If you bought just because of ebb or flow in bearish sentiment you’d get jerked back and forth. Bearish today… bullish tomorrow…


This statement is not true.

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Well, yes and no. There’s the old saying to buy when there’s blood flowing in the streets, which is also the basis for Mungo’s famous major bottom indicator.


Yes. I was just making the point that just because an indicator flips that’s not blood in the streets. Could be a ways to go yet. It may be raining but it’s not a deluge yet.

But I’m secretly afraid this bear will end with a whimper. A boo-boo. No blood in the streets

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It’s quite possible. One thing the electronic age has brought us is speed … everything, including social things, moves faster now. It is entirely possible that the speed of market shifts has also changed, and that it can happen so fast that the blood doesn’t even have time to hit the street!