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On sentiment (indicators):
"I always say when it comes to sentiment it basically carries 2 key forms of information:
Momentum information through the range as the crowd slowly figures out the narrative, chases past performance, gets carried along by the news/noise, and jumps on board the bandwagon.
And then contrarian information at extremes where everyone is on one side of the boat, and all it takes is a little rocking to throw everyone off. Or in other words, when there are a lot of minds that could be changed.
Usually contrarian signals are most potent when a sentiment indicator reaches an extreme and then pulls back, or e.g. around market bottoms when sentiment craters and then begins to turn up.
As things stand, sentiment is increasingly less bullish, and increasingly more bearish. Is it at contrarian levels yet? Probably close. Going by that previous comment; on both counts we’ve yet to see a turn in the indicators, so it probably still is a case of momentum information.
But it must be said either way that right now there are a lot of minds that could be changed if the right reasons came along…"
Source: Callum Thomas Topdown Charts
"I always say when it comes to sentiment it basically carries 2 key forms of information:
Momentum information through the range as the crowd slowly figures out the narrative, chases past performance, gets carried along by the news/noise, and jumps on board the bandwagon.
And then contrarian information at extremes where everyone is on one side of the boat, and all it takes is a little rocking to throw everyone off. Or in other words, when there are a lot of minds that could be changed.
Usually contrarian signals are most potent when a sentiment indicator reaches an extreme and then pulls back, or e.g. around market bottoms when sentiment craters and then begins to turn up.
As things stand, sentiment is increasingly less bullish, and increasingly more bearish. Is it at contrarian levels yet? Probably close. Going by that previous comment; on both counts we’ve yet to see a turn in the indicators, so it probably still is a case of momentum information.
But it must be said either way that right now there are a lot of minds that could be changed if the right reasons came along…"
Source: Callum Thomas Topdown Charts
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