«Sentiment Sinks to Extremes.»
Measuring the emotions of the masses takes on many forms. Some indicators look at what investors do. Others look at what they say. Those who use sentiment gauges believe they help spot extremes like when the crowd becomes too bullish or too bearish.
“The public is often right during the trends, but wrong at both ends.”Humphrey B. Neill
“You want to be greedy when others are fearful and fearful when others are greedy.”Warren Buffett
“When everybody thinks alike, everyone is likely to be wrong.”Humphrey B. Neill
One sentiment indicator making the rounds today is the AAII Investor Sentiment Survey. It asks individual investors their thoughts on where the market is heading in the next six months. Historically, when everyone is bearish – you should be bullish and vice versa.
This week, over 60% of respondents were bearish. It’s only the 5th time in history (the survey started in 1987) that we’ve seen so many bears.
As for the last four times this happened, the market was up more than 33% on average one year later.
Video Of The Day: Jedi Options – How to structure a Long Straddle into a volatile event
In today’s Jedi Options, Coach Tyler explains how to structure a #longstraddle into a volatile event. #optionstrading.
Chart of the Day: AAII Sentiment Survey
Hat tip to @ryandetrick.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.