14 replies to this topic

[VermeerUK]

I just don't get how foggy reads on sentiment (i.e..polls etc) can give you a better read over the actual price charts on what's going on or what 'may' happen in the market(s) at any given moment. I use the word "foggy" because as an example let's take the 'FF' polls...I mean seriously without knowing the context/reasons of how he or she voted what's the point or how does it help?..(i.e....Have people voted because they just thought they'd have a vote for fun or have they actually got money,any money on the line to back up the way they voted...etc) Surely an actual chart of let's say of an actively traded 'short-only' or 'long only' fund will give you a much,much better read/tell about 'sentiment' than any yes/no-Bull/Bear button(s) poll. Tis probably my lack of understanding of 'sentiment' at play here.......Can't see Mark et al wasting time on it here ,if there wasn't something in it that helps to make trading/investing decisions i guess. Like i said ....Personally" i just don't get it" Regards.V

[da_cheif]

pearls of wisdom comes from mark

http://tbn0.google.c...2520Earring.JPG

[OEXCHAOS]

There's a reason why we look at lots of different sentiment. And I'll tell you, it helps. Right now it's telling you that if you're looking for a major top, you're likely to be sorely disappointed, though a smaller correction is more of a possibility. At this point, I think you play price and volume and wait for something more significant from sentiment. All we're really seeing now are neutral or conflicting or constructive reads. But this entire rally has been supported by constructive sentiment from many measures.

[qqqqtrdr]

There's a reason why we look at lots of different sentiment.

And I'll tell you, it helps. Right now it's telling you that if you're looking for a major top, you're likely to be sorely disappointed, though a smaller correction is more of a possibility.

At this point, I think you play price and volume and wait for something more significant from sentiment. All we're really seeing now are neutral or conflicting or constructive reads.

But this entire rally has been supported by constructive sentiment from many measures.

OEX. Although I agree with you on a small correction based upon sentiment, I also will note that Sentiment could likely change once we get a sell-off. We presume that sentiment will turn more bearish as the market falls. This might not be the case. As the market rose, Sentiment turned more bearish because people believed we were close to a top, and that drove the market higher. Now Equity and CBOE Put/Call are relatively low, so the market is ready for a correction. We cannot figure out how large it will be until we see what the sentiment does when it does fall. There are less bears in AAII this week than last.

Barry

[Gary Smith]

I just don't get how foggy reads on sentiment (i.e..polls etc) can give you a better read over the actual price charts on what's going on or what 'may' happen in the market(s) at any given moment.

I use the word "foggy" because as an example let's take the 'FF' polls...I mean seriously without knowing the context/reasons of how he or she voted what's the point or how does it help?..(i.e....Have people voted because they just thought they'd have a vote for fun or have they actually got money,any money on the line to back up the way they voted...etc)

Surely an actual chart of let's say of an actively traded 'short-only' or 'long only' fund will give you a much,much better read/tell about 'sentiment' than any yes/no-Bull/Bear button(s) poll.

Tis probably my lack of understanding of 'sentiment' at play here.......Can't see Mark et al wasting time on it here ,if there wasn't something in it that helps to make trading/investing decisions i guess.

Like i said ....Personally" i just don't get it"

Regards.V

Sentiment is an art not a science and I can understand why many don't appreciate sentiment analysis, especially those who are primarily left-brained thinkers. Being a lefty, and thus primarily a right-brained thinker, charts, volume, oscillators and the like never got it done for me. Had it not been for sentiment, I would be some 60 year-old grocery bagger at my local Walmart. However, much like E-wave analysis, it's not unusual to find varying and contrary analysis among the various sentiment mavens. And there is an especially wide variance from the older and longer term practitioners of sentiment from the more modern day who try to make it into a black and white science.

[arbman]

Exactly (to Barry), the people react to the prices, volume and internals nowadays, not just fundamentals. Anyone thinking that the active traders are still quite dumb to follow only the fundamentals are in for a sore disappointment. People got so much better than before, there are still new comers, but the information about proper trading systems based on the breath, new highs and lows and option speculation is quite common now beside (not instead of) the fundamental forecasting...

[OEXCHAOS]

I just don't get how foggy reads on sentiment (i.e..polls etc) can give you a better read over the actual price charts on what's going on or what 'may' happen in the market(s) at any given moment.

I use the word "foggy" because as an example let's take the 'FF' polls...I mean seriously without knowing the context/reasons of how he or she voted what's the point or how does it help?..(i.e....Have people voted because they just thought they'd have a vote for fun or have they actually got money,any money on the line to back up the way they voted...etc)

Surely an actual chart of let's say of an actively traded 'short-only' or 'long only' fund will give you a much,much better read/tell about 'sentiment' than any yes/no-Bull/Bear button(s) poll.

Tis probably my lack of understanding of 'sentiment' at play here.......Can't see Mark et al wasting time on it here ,if there wasn't something in it that helps to make trading/investing decisions i guess.

Like i said ....Personally" i just don't get it"

Regards.V

Sentiment is an art not a science and I can understand why many don't appreciate sentiment analysis, especially those who are primarily left-brained thinkers. Being a lefty, and thus primarily a right-brained thinker, charts, volume, oscillators and the like never got it done for me. Had it not been for sentiment, I would be some 60 year-old grocery bagger at my local Walmart. However, much like E-wave analysis, it's not unusual to find varying and contrary analysis among the various sentiment mavens. And there is an especially wide variance from the older and longer term practitioners of sentiment from the more modern day who try to make it into a black and white science.

Gary,

It's definitely art, but it's also a science. Think of it as a more "non-linear" science.

And it's the best tool I've got after price and volume.

Mark

[VermeerUK]

"And it's the best tool I've got after price and volume." Wow!....Third best technical indicator...There must be something in it then. Thanks!....I was wondering how highly users of 'sentiment' rated it when considering all technicals aids. Tis not just 'sentiment' i find hard to use when making trading decisions .....Someone above mentioned options in a reply......Again plenty of 'unknowable' variables exhist with options reading also,imho....Example how many 'bears' are buying 'puts' because they feel a correction or bear market is around the corner,and hope to profit from it?...Or how many 'bulls' are buying 'puts' for insurance against good profit gains because they also think a correction/bear is around the corner.....And what about bulls who've had a very good run up in profits and out of their own wisdom/logic use 'put' insurance to protect what they've made,they aren't bearish on the market,but it just seems the logical thing to do at a certain price level. Again all "UNKNOWABLE!" variables......Which i for one just aint that keen about making costly decisions on. Regards.V

[arbman]

Some of the sentiment measures are built into the trading patterns or cycles. This is part of the human psychology, everything else is actually in the price and volume measures (or momentum). What separates the cycles and trading patterns from the momentum is the former anticipates and the latter follows the trend. However, the prices can go flat at a cycle through and continue its advance (or vice versa). You'd better check for the liquidity and risk in the market place to gauge the excessive speculation during the cycle throughs and peaks to tell whether the market will change its trend. I look at the yield (credit) spreads, implied volatilities and commodities to gauge the liquidity and risk out there, they tend to lead. There; this is the full pipeline of trading for me... - kisa

Edited by kisacik, 17 May 2007 - 12:49 PM.

[maineman]

How many times has this conversation come up over the years? It all depends on your time frame. If you are trading the SP for intraday points, sentiment polls won't help you, but "sentiment" based on Tick and Trin will. If you are setting up intermediate trades, then weekly put call readings and "sentiment" polls will likely help you quite a bit. If you are investing for the long haul contrarian indicators will make you very rich... a low PE stock, unloved by the public, but being accumulated by the owners, etc. etc... great "sentiment". Define your vehicle and your time frame and sentiment will make much more sense in the proper perspective. mm