Too Many Bears,.. Buying Too Many Puts

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When measuring market direction,
it is important to consider excessive bullish/bearish sentiment,
to quantify price direction over the near term.

Right now bearish sentiment,traders believing the market will go down,and putting their money behind it
by buying Put Options, rose to a 2019 high in September, and has continued to be elevated again in October.

Simply put, the market will rarely go along with the crowd of bearish sentiment.

In fact more often then not, the market will do exactly the opposite, and continue to rise in price
climbing a proverbial wall of worry that will frustrate bears where it hurts them the most, in their bank accounts.

I'm not saying the market can't or won't go down.
But it won't go down, when a crowd of overly bearish traders expect it to.


bye bye short ,bye bye!!!!
By the way, I think the better reentry into Energy Sector you wrote about would be today (yesterday was better). ERX (Direxion Triple Leverage Energy Bull) and HAL (Haliburton) both look promising with bullish divergence on RSI. Probably just about any individual Energy Company with good fundamentals/balance sheets would work.
Interesting, thanks. I overlaid the CNN fear-and-greed chart to price, and tried to 'average it out'.
Sentiment over the past 2 years does seem to be heading fear-wards. Though I would say sentiment (and investors decisions) are lagging, and really no indicators at all.
I think all this tells you is that we're in a consolidation period.
I wouldn't rule out a crash. What is presented here is only a portion of the data. Take a look at Where we are in the f&g and p/c charts is typically only quarter to halfway through a deep drop sequence, so it really depends on how quick and powerful the final part of the drop turns out to be.

Thank you for keeping me on my toes.
I have seen this CNN Fear and Greed Summary before
and it's truly informative.
There is going to be a big surprise coming..
that's for sure.
I agree with this column completely. That's what I have been pointing out. We won't get a Crash now because most people expect it. I think when most of the skeptics turn bullish is when this bull market will end and we will finally get this crash that everyone has been predicting. People have been predicting a crash since beginning of this Bull Market (2009) and eventually, they will be right. All Bull Markets eventually end. During all this time, the Doom and Gloom articles/predictions have been as relentless as this Bull Market has been.
+1 Reply
The_Unwind Trader865x

The element of surprise has yet to raise it's head.
Dragon or a grizzly, we shall see.
Trader865x The_Unwind
@The_Unwind, I just noticed the above comment about the CNN Fear & Greed Indicator. I follow that too. I'm not a fan of CNN but they get this right. Investors Business Daily (IBD) has a similar psychological indicator setup but by subscription only.
Thanks for another informative charts.
+2 Reply
The_Unwind mhayeea

:) Thank you
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