Posts Tagged ‘ bull bear psychology ’
We currently see a market trend rebound. SentiTrade’s 38 day moving average yesterday crossed above the 200 level for the first time since June 9th 2011. Interestingly, the DAX accomplished the same, the day before yesterday.
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Tags bull bear psychology - corrective waves - crowd psychology - dax index - investment strategy - low point - market trends - pattern recognition
We are now entering unchartered market psychology territory. SentiTrade’s 38 moving average line has crossed the 200 average, signifying a predominately bullish market sentiment. At the same time we note increasingly high levels in SentiTrade’s sentiment volatility index (V-SQ). It is now well above the 85% level, and is normally a clear sign of Read more
Tags behavioral finance application - bull bear psychology - corrective waves - crowd psychology - dominant trends - market sentiment - psychology trends - sentiment volatility - system trading
In last week’s blog post we noted several similarities between today’s market situation to that of 2008. Then as now, we see lower levels in market sentiment volatility coupled with a momentary upswing in SentiTrade values. As forecasted, this brought the DAX to higher levels this week. Read more
Tags bull bear indicator - bull bear psychology - corrective waves - crowd psychology - excessive investor optimism - market reversal - sentiment volatility
We’re currently seeing a similar situation to that of early 2008. The market sentiment and stock prices have recovered for the past few weeks. Since mid Dec. the DAX index has gained ca. 7% and in this time window, the SentiTrade Team made 2 important observations: Read more
Tags bull bear psychology - dax futures - market psychology - market sentiment - market sentiment values - sentiment analysis - sentiment volatility
Market Sentiment and Oil Price; A correlation between developments in SentiTrade’s market sentiment values and commodity prices has been established. An initial study looked at entry points based on the 38 / 200 moving averages in the Brent Future (BRN) vs. those of the SentiTrade Index. In the chart, SentiTrade’s “cross above” is marked with black squares, whereas the BRN 200 line is green and the 38 line in red. Read more
Tags ATM - BRN strategy - bull bear psychology - commodities trading - crowd psychology - market prediction - market sentiment - position sizing
By increased sentiment volatility, i.e. when news events swing from hope to doom and vice versa, does a “risk on” situation emerge? One may of course calculate volatility on practically any instrument. Generally, high volatility is express nervousness and is frequently associated with sharply falling prices.
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Tags bull bear - bull bear psychology - corrective waves - dax index - excessive investor optimism - investment strategy - market reversal - sentiment analysis - sentiment volatility
Recently, we’ve looked into a new trading concept called “Mind The Gap”. The strategy looks at how the sentiment develops towards the end of a the day. We then use this data to anticipate the opening gap for the following day. Although it is well know that (very) bad news publish after market close, our data show days ending on a positive note to be followed by a positive opening. Read more
Tags behavioral finance - bull bear psychology - crowd psychology - end of day sentiment - excessive investor pessimism - gap trading - market psychology - market reversal - market sentiment - sentiment volatility
Algorithmic trading, aka algo-, black-box or robo-trading is using automated computer software to create market orders. The computer algorithm decides on timing, price, position sizing and can be executed without human intervention. In recent years, large pension funds and institutional traders have implemented algo-trading to minimize market impact, i.e. divide large trades into smaller orders. Read more
Tags algo trading - algorithmic trading - black box trading - bull bear psychology - confirmation bias - crowd psychology - investor psychology - market prediction - market psychology - risk on risk off - robo trading - sentiment average - sentiment momentum
Now that the politicians have decided that Greece is beyond saving, focus is quickly moving onto the next challenge, Italy. Yesterday, the country staged another bond auction, the treasury sold €3.9 billion for a yield of 5.6%, up 0,7% from the July 14th auction. More concerning than the rate increase however, was that the demand was notably down. As a result, the benchmark rate rose to 5,75%, approaching the levels from early August, when the ECB stepped in. Read more
Tags asset allocation - bull bear psychology - derivatives trading - excessive investor pessimism - italian bonds - market psychology - risk on risk off - sentiment momentum - system trading - trading strategy
SentiTrade’s market psychology indicator had already trailed well below its 20 day moving average since early June as the market took a dive over the past few weeks. The 20 day moving average calculation is based on the daily ratio number, i.e. the relationship between positive and negative news articles for the past 24 hours. It is an important projection because it determines how to read the real time SentiTrade quotient throughout the day. Read more
Tags 20 day moving average - bull bear psychology - crowd psychology - excessive investor optimism - excessive investor pessimism - investment strategy - sentiment trigger point
