Stock Market Sentiment Surges [CHART]

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Stock Market Sentiment Surges [CHART]
Funny things can happen when you mix human psychology with greed and constant stimulus. The seemingly straight-line march upward in the S&P500 has triggered a rise in bullish sentiment as a great migration is underway from neutral sentiment to bullish sentiment.
When investors are faced with almost consistently rising stock prices, and the constant news/noise from social media, blogs, and traditional media, it reinforces the bullish sentiment and engages a positive feedback loop – also referred to as an awakening of animal spirits.

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Measuring sentiment can be difficult as there are many different gauges and metrics and sources of info.  We've taken the approach of bringing in surveyed sentiment, risk pricing, and valuations to give a holistic view of stockmarket confidence which we call The Euphoriameter.  As it turns out the October reading of this indicator has reached not only a new post-crisis high, but has actually moved to levels last seen during the height of the dot com boom.
For newer participants in the market, take note because this is what a real bull market looks and feels like, and while it may continue higher for longer (that important point about animal spirits), the higher confidence rises, the greater the expectations, the bigger the scope is for disappointment.  Until then euphoria is the dominant mood of the market at this point.
We're told that markets don't go up in a straight line... but what happens when they basically do just that? Bullish sentiment rises, that's what.  We're seeing a great migration from neutral to bullish sentiment.

The Euphoriameter has moved up to levels last seen during the dot com boom of the late 1990's.

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Topdown Charts: "chart driven macro insights" Based in Queenstown, New Zealand, Topdown Charts brings you independent research and analysis on global macro themes and trends. Topdown Charts covers multiple economies, markets, and asset classes with a distinct chart-driven focus. We are not bound by technical or fundamental dogma, and instead look to leverage any relevant factor to capture the theme. As such, here you will find some posts that are purely technical strategy, some that just cover economics and data, and some posts that use multiple inputs to tell the story and identify the opportunities. Callum Thomas Head of Research Callum is the founder of Topdown Charts. He previously worked in investment strategy and asset allocation at AMP Capital in the Multi-Asset division. Callum has a passion for global macro investing and has developed strong research and analytical expertise across economies and asset classes. Callum's approach is to utilise a blend of factors to inform the macro view.

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