What exactly is market sentiment?
According to Wikipedia:
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.
So, if market sentiment is bullish, investors would expect prices to rise, and if it's bearish, they would expect prices to fall.
But, what if market sentiment is at extreme levels -- will this lead to major moves in the direction of the trend or major changes in market direction? More importantly, how will it affect your investments and what can you do about it?
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Best of all, in just a matter of minutes you can educate yourself on this overlooked, but time-tested market indicator. Find out what current market sentiment readings mean for your investments.
