On May 22nd we wrote a post on sentiment volatility, reporting on frequent and erratic mood swings in financial news publications. SentiTrade was detecting volatility levels that had not been seen since the Lehman crisis of 2008 and 2009(!). Immediately after our sentiment volatility index (V-SQ) broke the 100 level on May 24th, the Spanish bank, Bankia asked for it’s €19 billion bailout and the DAX lost over 5% the following days… Read more

Tags bailout - bankia - eurobonds - fical pact - financial news - grexit - Lehman comparison - sentiment analysis - spanish bank

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

We didn’t need a market sentiment indicator the past few days to tell us that the market was on edge. The European Central Bank waited until after market close last Friday to publish the stress test results. Although it came out better than expected, doubts were quickly raised because the test didn’t appropriately deal with the financial ramifications of a Greek default. Read more

Tags asset allocation - behavioral finance indicator - crowd psychology - market psychology - market reversal - market sentiment - risk on risk off - sentiment analysis - sentiment indicator - sentiment trigger point - sentiment volatility

In a recent post we discussed SentiTrade’s realtime market sentiment calculations and how this could be used to anticipate intraday market moves, particularly in early trading. Today we’ll show how SentiTrade’s end-of day values may be used for taking positions with a somewhat longer perspective. First, SentiTrade’s end-of day calculation issues at 08.55 just before Read more

Tags behavioral finance - bull bear psychology - crowd psychology - dominant trends - excessive investor pessimism - market psychology - market sentiment - market sentiment values - sentiment analysis - trading strategy

We have previously pointed out an astounding correlation between rising SentiTrade values and emerging DAX momentum. Today the SentiTrade indicator opened at 0,5. At 08.18 the sentiment quotient jumped to 0,6 and then 12 minutes later, at 08.30 to 0,65. From 8.45 to 10.30 we then see a sharp rise on the DAX index, from 7222 to 7282. Read more

Tags behavioral finance application - behavioral finance indicator - bull bear psychology - dax index - investor psychology - market prediction - market psychology - market sentiment - market sentiment values - pattern recognition - sentiment analysis - sentiment volatility - trading strategy