Unrelenting Negative News in Media is Bullish for Stock Market From Contrarian Viewpoint
Unrelenting Negative News in Media is Bullish for Stock Market From Contrarian Viewpoint. We use investor sentiment as a contrarian indicator on the direction of the stock market because historically they are wrong. So, it is no wonder investors have been so skittish about the market in the face of unrelenting negative news in the media. As such, the media has enormous influence although the media historically is wrong. The chart below from the San Francisco Federal Reserve shows how wrong-headed the media historically has been when compared with the direction of the S&P 500. While the media remains unrelentingly negative, investor sentiment indicators are in so-called “mid-range.” In other words, they are not flashing sell signals as they were last fall but heading in that direction. That to us means there’s still room for some upward market momentum.