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Investment
Sentiment Analysis
Measuring the overall mood or attitude of investors toward a stock or the market.
Sentiment is often a contrarian indicator. Extreme greed or extreme fear usually signals turning points. Tools include the Fear & Greed Index, put-call ratio, and social media monitoring.
It's taking the temperature of the crowd to see if they are excited, scared, or bored.
Real world: When everyone on social media and news is extremely bullish, sentiment is high and a correction may be near. When fear dominates, sentiment is low and a bottom may be forming.
💡 When everyone is euphoric, be cautious. When everyone is terrified, opportunities appear.