Indexes such as the fear/greed and call/put ratio are things I often look at to gauge the start of a market. This following chart is no different. It is the Citi Panic/Euphoria index.
When looking at this chart we see the "meat" of it which lies around the 0.3 to -0.2 area. That is where sentiment is most of the time.
Then you have the outliers, and generally they mark pivot points in the market (or tops and bottoms if you will).
The most obvious example is the 2001 DOT COM bubble. Euphoria was higher than ever, until it all went so bad.
Now, we're looking at a this gauge being even higher than back then. Higher than it has ever been.
And I have to ask myself, how in good conscience can I be long the stock market here???
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