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Citi Panic Euphoria Model Remains Elevated Thumbnail

Citi Panic Euphoria Model Remains Elevated

We actively monitor several investor sentiment gauges that indicate how optimistic or pessimistic investors are about the stock market. 

One of the sentiment indicators we monitor is the Citigroup Panic/Euphoria Model.

When it reaches an extreme, I comment on it here. 

According to Citi, the panic/euphoria model is a gauge of investor sentiment. It identifies "Panic" and "Euphoria" levels which are statistically driven buy and sell signals for the broader market.  

Historically, a reading below panic supports a better than 95% likelihood that stock prices will be higher one year later, while euphoria levels generate a better than 80% probability of stock prices being lower one year later. 

The Panic/Euphoria Model continues to be elevated just under Euphoria. 

Mike Shell