Sentiment Indicators Not Saying Yay nor Nay on Stock Market Direction
Sentiment Indicators Not Saying Yay nor Nay on Stock Market Direction. We use investor sentiment as important indicators for guidance on the direction of the stock market. But there are times sentiment indicators can tell us little or nothing. For example, as you can see from the chart below, the SentimenTrader’s Smart Money/Dumb Money Confidence spread is stuck in the neutral range. So, what we do? Although sentiment is a valuable tool, it is among a number of indicators we use. For instance, we’re watching very closely the decline of share price of JP Morgan Chase (see Chart of the Week). It is the largest bank in the United States and sixth largest in the word in terms of assets. Future precipitous declines are a good indication of rough times ahead for both the market and the economy.