Market sentiment
Encyclopedia
Market sentiment is the general prevailing attitude of investor
s as to anticipated price development
in a market. This attitude is the accumulation of a variety of fundamental
and technical
factors, including price history, economic reports, seasonal factors, and national and world events.
For example, if investors expect upward price movement in the stock market, the sentiment is said to be bullish. On the contrary, if the market sentiment is bearish, most investors expect downward price movement.
Market sentiment is monitored with a variety of technical and statistical methods such as the number of advancing versus declining stocks and new highs versus new lows comparisons. A large share of overall movement of an individual stock has been attributed to market sentiment The stock market's demonstration of the situation is often described as all boats float or sink with the tide, in the popular Wall Street
phrase "the trend is your friend".
Market sentiment, as such, might be acquired from more than one sentiment analytical tool. For example there could be just simple extraction of movement on stock exchange and validly called market sentiment. Another tool is to extract the news and media information based on their polarity. Yet another sub-subject might be community sentiment about the market movements (blogs, forums).
In the last decade, investors are also known to measure market sentiment through the use of news analytics
, which include sentiment analysis
on textual stories about companies and sectors.
Investor
An investor is a party that makes an investment into one or more categories of assets --- equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc...
s as to anticipated price development
Market trends
A market trend is a putative tendency of a financial market to move in a particular direction over time. These trends are classified as secular for long time frames, primary for medium time frames, and secondary for short time frames...
in a market. This attitude is the accumulation of a variety of fundamental
Fundamental analysis
Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and...
and technical
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
factors, including price history, economic reports, seasonal factors, and national and world events.
For example, if investors expect upward price movement in the stock market, the sentiment is said to be bullish. On the contrary, if the market sentiment is bearish, most investors expect downward price movement.
Market sentiment is monitored with a variety of technical and statistical methods such as the number of advancing versus declining stocks and new highs versus new lows comparisons. A large share of overall movement of an individual stock has been attributed to market sentiment The stock market's demonstration of the situation is often described as all boats float or sink with the tide, in the popular Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
phrase "the trend is your friend".
In the last decade, investors are also known to measure market sentiment through the use of news analytics
News analytics
News analysis refers to the measurement of the various qualitative and quantitative attributes of textual news stories. Some of these attributes are: sentiment, relevance, and novelty...
, which include sentiment analysis
Sentiment analysis
Sentiment analysis or opinion mining refers to the application of natural language processing, computational linguistics, and text analytics to identify and extract subjective information in source materials....
on textual stories about companies and sectors.