Market sentiment
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Market Sentiment
The feeling or tone of a market (i.e. crowd psychology). It is shown by the activity and price movement of securities.
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For example, rising prices would indicate a bullish market sentiment. A bearish market sentiment would be indicated by falling prices.
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Market sentiment
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Market sentiment
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This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (June 2011) |
Market sentiment is the general prevailing attitude of investors as to anticipated price development in a market. This attitude is the accumulation of a variety of fundamental and technical factors, including price history, economic reports, seasonal factors, and national and world events.
For example, if investors expect upward price movement in the stock market, the sentiment is said to be bullish. On the contrary, if the market sentiment is bearish, most investors expect downward price movement.
Market sentiment is monitored with a variety of technical and statistical methods such as the number of advancing versus declining stocks and new highs versus new lows comparisons. A large share of overall movement of an individual stock has been attributed to market sentiment[1] The stock market's demonstration of the situation is often described as all boats float or sink with the tide, in the popular Wall Street phrase "the trend is your friend".
Market sentiment, as such, might be acquired from more than one sentiment analytical tool. For example there could be just simple extraction of movement on stock exchange and validly called market sentiment. Another tool is to extract the news and media information based on their polarity. Yet another sub-subject might be community sentiment about the market movements (blogs, forums).
In the last decade, investors are also known to measure market sentiment through the use of news analytics, which include sentiment analysis on textual stories about companies and sectors. Sentiment trading is gaining traction as a methodology through proponents of its charting accuracy such as tradingtraders.com
See also
References
- ^ Thomas Dorsey, Point and Figure Charting, Sentiment has a "66% influence on the overall movement of an individual stock"
External links
- Investopedia.com - Sentiment Indicator
- MarketMeter.com - Market Sentiment Survey
- sentix-Indices - Market Sentiment database
- Swedish Market Sentiment - Swedish Market Sentiment Survey and database
- Opfine.com - Statistical market sentiment analysis from financial news sources
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