Category: Investor Behavior Modification
Investor Behavior and Modification
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Investor fear has been driving the stock market down
I like to observe the return drivers of price trends. Though I primarily focus on the direction of the price trend and volatility, I also consider what drives the price trend. Yesterday I suggested the… Read More
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Feeling and Doing the Right Thing at the Right Time
Last week I shared the observation that VIX Implied Volatility is Settling Down. The VIX Index is a measure of the market’s expectation of future volatility, so the market is pricing in less volatility from here. However,… Read More
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Investor Sentiment into the New Year 2019
Investor sentiment measures may be used as contrarian indicators. We expect the market to do the opposite of what the indicators are saying when they reach an extreme level of bullish/greed/optimism or bearish/fear/pessimism. Identifying extreme… Read More
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What’s going to happen next for the stock market?
The popular stock indexes are now down about -5% year to date. The popular stock indexes are now about -13% off their highs. I don’t normally include the NASDAQ since it’s so overweight the Technology… Read More
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Observations of the stock market downtrend
In the last observation I shared about the stock market, “The stock market trends up with momentum,” we saw the stock market reverse back up with strong momentum. The S&P 500 stock index had declined about -7%… Read More
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VIX level shows market’s expectation of future volatility
Volatility is a measure of the frequency and magnitude of price swings up and down in a market or stock over a period of time. Lower volatility is when prices are calmer and don’t swing up and… Read More
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Global Market ETF Trends
Looking at the broad global markets, U.S. stocks are in a positive trend along with the U.S. Dollar. International stocks, commodities, and foreign currency are trending down. With the directional trends and momentum being in… Read More
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Trend following applied to stocks
A stock must be in a positive trend to earn a huge gain… A stock must be in a downtrend to produce a large loss… The common factor? the direction of the trend… That’s what… Read More
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Stock market investor optimism rises above historical average
“Optimism among individual investors about the short-term direction of the stock market rebounded, rising above its historical average.” The AAII Investor Sentiment Survey is a widely followed measure of the mood of individual investors. The… Read More
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The week in review
In case you missed it, below are all of the observations we shared this week. When there are more directional trend changes and volatility, I find more asymmetries to write about. That’s because I look… Read More