KirkLindstrom.com
- Charts
- 2012
- ISE
vs. DJIA Graph |
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ISE Sentiment Index vs
DJIA International Securities Exchange Sentiment vs the DOW |
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February 27, 2012.
Charts of the International Securities Exchange (ISE)
Sentiment Index plotted versus the Dow Jones Industrial
Average (DJIA
charts), S&P500 ( S&P500
Charts) and NASDAQ composite index (NASDAQ
charts) are key sentiment indicators for stock
market technical analysis. According to the ISE web site (Note 1): The ISE Sentiment
Index is a unique put/call value that only uses
opening long customer transactions to calculate
bullish/bearish market direction. Opening long
transactions are thought to best represent market
sentiment because investors often buy call and put
options to express their actual market view of a
particular stock. Market maker and firm trades, which
are excluded, are not considered representative of
true market sentiment due to their specialized nature.
As such, the ISEE calculation method allows for a more
accurate measure of true investor sentiment than
traditional put/call ratios.
Contrarian theory states the time to buy is when fear and pessimism is at a maximum since this usually occurs near market bottoms. Oddly, the stock market as measured by the DJIA ((Dow Jones Industrial Average) is up near a 4 year high while sentiment as measured by the ISE index has fallen back down to near record lows. I update investor sentiment and what it means to my stock market outlook every month in "Kirk Lindstrom's Investment Letter." Subscribe
NOW and get the February 2012 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.) |
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More about: Sentiment Indicators - |
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Note 1: ISE Web Site: http://www.ise.com/ |
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Disclaimer: The information contained in this web site is not intended to constitute financial advice, and is not a recommendation or solicitation to buy, sell or hold any security. This blog is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice. Copyright © Kirk Lindstrom. Note: "CORE & Explore®" was coined by and is a registered trademark of Charles Schwab & Co., Inc. |