Sentiment Matters More Than Ever In Trading and Investing And All-Time Highs in My Degenerate Economy Index

Hello from Coronado…

The Stocktwits Sentiment Indicator is now LIVE on our homepage.

I have been sharing this here while in production the last few months. This is the freshest, most unique data set of stock market sentiment and while I have been eyeballing it myself since 2008 by way of how I curate/watch the streams, we went back through our data from 2018 to build this indicator so that everyone could use it.

During the ‘Liberation Day’ $VIX 60 explosion early April, the Stocktwits Sentiment Index exploded in bearish emotion well past COVID levels. It was a bit confusing, but in combination with $VIX 60, I shared that I was buying stocks. It worked well.

I think everyone will benefit from checking on on this at least weekly.

The $VIX measures expected volatility

Stocktwits Sentiment Index measures retail investor emotion.

Together, they sharpen your market view.

Looking at the sentiment data on a shorter term basis below you can see that the sentiment broke through to a bearish trend at a steep angle back at the end of January. Of course this would have been a better time to sell stocks…and next time everyone has the opportunity to be a little better prepared. By April’s record peak, you would have been the last person selling.

as I write this we are hovering back at around 1, emotions have calmed and volatility has subsided, so there is not much to read into the future direction as sentiment is mixed.

You may never see another bearish spike like April again and Trump will have another notch in his belt for creating the shortest and dumbest bear market in history with the worst sentiment ever…but I would not bet against the combination of Trump and the ‘degenerate economy’ spiking sentiment fiercely a few more times.

Speaking of the ‘degenerate economy’…my index is continuing to crush the $QQQ ( ▼ 0.16% ) and $SPY ( ▼ 0.11% ) making fresh all-time highs yesterday. You can follow it here and it has been live now to follow for free since I started it two years ago.

I have made a few recent changes as the the panic unfolded and for now has subsided.

I will be tightening it up by dropping 3-4 names over the next month to keep the portfolio between 15-20 companies. Companies I added over the last few months include, Uber, Reddit, GRAB, Doordash, Gambling.com and Coupang. I lowered positions in Apple, Draftkings, Sea, Roblox and Coinbase.

Have a great rest of the day.