"Market Sentiment Watch" refers to the monitoring and assessment of market sentiment—the overall feelings of investors about a specific financial market or the entire market. Understanding market sentiment helps investors identify price trends and make informed trading decisions.
Common indicators for monitoring market sentiment:
- Fear & Greed Index: Developed by CNN, this index measures the level of fear or greed among investors in the stock market. A high index indicates greed, while a low index indicates fear.
- Volatility Index (VIX): Also known as the "fear index," VIX measures the market's expected volatility in the short term, reflecting the level of investor anxiety.
- Put/Call Ratio: The ratio of the volume of put options to call options, helping to assess market sentiment; a high ratio indicates pessimistic sentiment.
- Investors Intelligence Survey: This survey tracks the ratio of optimistic to pessimistic financial advisors, providing insight into the overall market sentiment.
Monitoring market sentiment is an important part of an investment strategy, helping investors identify potential opportunities and risks, thereby making smarter trading decisions.
