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CNNs "Greed" sentiment at highs


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#1 Rogerdodger

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Posted 30 October 2021 - 12:40 PM

FWIW (IMHO) ;-)

https://money.cnn.co...fear-and-greed/Fear-Greed.jpg

 

"You can't fight the FED" and the "Trend is your friend" have been the rule since the 2020 Springtime Covid Fear.

 

Mike Burk's seasonal charts are all positive for November... EXCEPT for the first week.

 

So with high sentiment and seasonal weakness, next week may see a pullback.


Edited by Rogerdodger, 30 October 2021 - 01:52 PM.


#2 RadioHead

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Posted 31 October 2021 - 02:22 AM

Greed is good!

 

If you do any statistical analysis on this indicator, you will realize it is meaningless. 

 

Take the current reading of 73 and find every other readings of 73 going back many years. Then look forward 5 days, 10 days, 20 days, 60 days or whatever number of days and tell me if you get any advantage. Average them out, put a standard deviation on it. And you will see that it does not give you any edge at all. You can also quantify seasonality and add it to your study of the first indicator. It will still be absolutely meaningless. Keep in mind that you have to have a statistically significant sample to justify your conclusion, which you will not get. 

 

The word "may" does not apply in trading as well. The market may or may not pull back at any time. It is what you chose to do matters. "May" is not a buy or sell order. "May" is not a trading plan.

 

2+2=5



#3 pdx5

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Posted 31 October 2021 - 10:11 AM

I agree with radiohead. This is a meaningless indicator for longer than 2 hours.


"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#4 Rogerdodger

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Posted 31 October 2021 - 10:19 AM

The word "Greed" is not properly used in this CNN observation.

But in our current culture, especially considering the "news" source of this poll, it is the typical pejorative application for anyone desiring to make a profit.

Fear vs Bravery might be a better combination... Except that now even the word "Brave" has suddenly become both a pejorative and a racist word.  It's probably a sexist word also

 

"It's always somethin' " said the racist Rosana Rosana Danna.

Never mind


Edited by Rogerdodger, 31 October 2021 - 02:59 PM.


#5 Rogerdodger

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Posted 31 October 2021 - 03:00 PM

If you do any statistical analysis on this indicator, you will realize it is meaningless.

If it is as useless as you imply, then logically, so are the 7 indicators which form it's basis.

 

The CNN model is not poll based but derived from 7 market indicators

 

Are these 7 indicators meaningless also?

•Stock Price Momentum: The S&P 500 (SPX) versus its 125-day moving average
•Stock Price Strength: The number of stocks hitting 52-week highs and lows on the New York Stock Exchange
•Stock Price Breadth: The volume of shares trading in stocks on the rise versus those declining.
•Put and Call Options: The put/call ratio, which compares the trading volume of bullish call options relative to the trading volume of bearish put options
•Junk Bond Demand: The spread between yields on investment grade bonds and junk bonds
•Market Volatility: The VIX (VIX), which measures volatility
•Safe Haven Demand: The difference in returns for stocks versus Treasuries


Edited by Rogerdodger, 01 November 2021 - 12:07 AM.


#6 Spectacular Bid

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Posted 01 November 2021 - 11:07 AM

The Fear and Greed Index is absolutely not Totally Worthless. It's only Partially Worthless. Unfortunately it's a Large Part.



#7 K Wave

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Posted 02 November 2021 - 10:16 AM

Greed is good!

 

If you do any statistical analysis on this indicator, you will realize it is meaningless. 

 

Take the current reading of 73 and find every other readings of 73 going back many years. Then look forward 5 days, 10 days, 20 days, 60 days or whatever number of days and tell me if you get any advantage. Average them out, put a standard deviation on it. And you will see that it does not give you any edge at all. You can also quantify seasonality and add it to your study of the first indicator. It will still be absolutely meaningless. Keep in mind that you have to have a statistically significant sample to justify your conclusion, which you will not get. 

 

The word "may" does not apply in trading as well. The market may or may not pull back at any time. It is what you chose to do matters. "May" is not a buy or sell order. "May" is not a trading plan.

 

2+2=5

It is phenomenal at bottoms...

 

When it hits near Zero...close your eyes and buy

 

Last 2 were Dec 2018 and March 2020

 

Probably due to fear being more intense than greed...


Edited by K Wave, 02 November 2021 - 10:17 AM.