Capital Market Sentiment Analysis

lipkarlock Saturday, January 23, 2021

Do you know that we can actually check the overall traders or investors sentiment for the overall stock market or the capital market?

There are ways where you can check the overall market sentiment.

Here are 3 ways where you can check the market sentiment:

1. Social Sentiment Indicator

2. Greed and Fear Index

3. Buzz ETF

Certain websites are able to also tell the net position of buyers vs sellers.

I obtained the data below from DailyFX.

Here are the current sentiment analysis summary up to Jan 2021 data.

Overall Market Sentiment Summary

Looking at the chart above, we can see that not all market are having the similar sentiment.

Details Analysis

Cryptocurrency

One of the hot topic for the past few weeks is definitely Bitcoin.

We can see that the buyers are coming back in Jan 2021.

While for Ethereum, we are also seeing that the price is shooting up since Jan 2021.

Forex

For EUR/USD, we can see that the buyers are also coming back since Dec 2020.

Commodity

What about Gold?

It seems for gold, it has always been net buyers.

Similarly for Silver, it is also net buyers.

I believe that because of the fact that gold and silver have been always considered as a hedging tool, it seems that this trend will remain.

US Stock Market

Now, let's look at the US Stock Market.

The US stock market has been kept on hitting all-time high, and I expect it to remain to be so for the coming years.

US Market has been consistently performing well for many decades and with so many strong companies especially technology, e-commerce, consumer discretionary and healthcare-related companies doing well last year in 2020 despite Covid-19 pandemic, I'm still bullish on the market.

US 500: Retail trader data shows 37.68% of traders are net-long with the ratio of traders short to long at 1.65 to 1. The number of traders net-long is 7.78% higher than yesterday and 5.07% lower from last week, while the number of traders net-short is 7.21% lower than yesterday and 8.78% higher from last week.

Interestingly, it seems we are seeing net sellers for the US Market.

While the market keeps making all-time high, I guess most people are making incorrect decision shorting the market?

In my opinion, as an investor, we need to buy good fundamental strong companies when it retraces to the support level.

Do not follow the crowd.

What do you think of the charts above?

Are you a net seller or net buyer?

Let us know your comment below.

Reference:

https://www.dailyfx.com/sentiment-report

https://www.investing.com/etfs/buzz-us-sentiment-leaders

http://graphics.wsj.com/twitter-sentiment/

https://money.cnn.com/data/fear-and-greed/