The sector sentiment charts show the current sentiment reading for the most popular exchange traded funds (ETF).
Each measure is ranked against its historical norms to determine whether or not the current level is at an extreme, then totaled to come up with an overall score.
The Optix can go from 0 (maximum pessimism) to 100 (maximum optimism), though it generally stays above 20 and below 80.
As with other contrarian indicators, when sentiment gets extremely pessimistic, below 30, we would become alert to a possible reversal to the upside as expectations improve from very low levels.
When sentiment is very high, above 70, then we would become concerned about a correction as expectations may have gotten too optimistic.
Also see:
How Do I Read the Global Sentiment Charts?
Questions or suggestions?
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