Of course, I recall foolishly trying to game these extremes in
2008 and 2009 while the swings blew through every indicator like a
knife through butter. Torture. I only recently resumed
trading (feeling the bull market has expired) and it feels like the
same damn extreme environment as 2008 and 2009.
I find waiting for the reversals and pullbacks to be hit or
miss. I win some, lose some and just break even. Yet gaming
a reversal before it happens stretches my sanity.
I look at all these charts, for setups, and still have not quite
figured it out. I hope I can learn from the frustration. I am
missing something.
"Nasdaq investor sentiment is worse now than it was in MARCH 2020."
"That’s an extremely aggressive bearish posture." (Bottom 1.8% of ALL days since 2000)
"Bearishness has fallen to such an extreme that it supports a significant stock market rally."
This is all fine and good as a contrary indicator and has been
very effective over the past decade. It should also be noted that
it was below -60% for 24 weeks from 2000-2002 and resulted in an
average 6-month return of -6.6% in the Nasdaq Composite.
Think of sentiment as a secondary indicator and focus on PRICE
as King
Bearish sentiment extremes: https://twitter.com/MacroCharts/status/1484495998864920578 Of course,
Posted by curranjohn on 21st of Jan 2022 at 08:53 am
Bearish sentiment extremes: https://twitter.com/MacroCharts/status/1484495998864920578
Of course, I recall foolishly trying to game these extremes in 2008 and 2009 while the swings blew through every indicator like a knife through butter. Torture. I only recently resumed trading (feeling the bull market has expired) and it feels like the same damn extreme environment as 2008 and 2009.
I find waiting for the reversals and pullbacks to be hit or miss. I win some, lose some and just break even. Yet gaming a reversal before it happens stretches my sanity.
I look at all these charts, for setups, and still have not quite figured it out. I hope I can learn from the frustration. I am missing something.
Sentiment Trader Response
Posted by steve on 21st of Jan 2022 at 08:58 am
This is all fine and good as a contrary indicator and has been very effective over the past decade. It should also be noted that it was below -60% for 24 weeks from 2000-2002 and resulted in an average 6-month return of -6.6% in the Nasdaq Composite.
Think of sentiment as a secondary indicator and focus on PRICE as King
will do. Thanks.
Posted by curranjohn on 21st of Jan 2022 at 10:26 am
will do. Thanks.