Did Zuck Save The Market?
Did Mark Zuckerberg and Meta just save the market?
As I write this Meta (FB) is trading up more than 15% in the pre-market after reporting better than expected earnings after the close yesterday.
Meta is the 8th largest holding in the tech-heavy QQQ which has been struggling as of late.
As you can see below this potential boost from FB happened right at a critical area of support...
As for Meta stock, it was in serious need of some good news...
Is Meta stock the catalyst that puts in a tradable bottom or is there something else at work?
Lately, I've been discussing with members that sentiment has had a very bearish tilt for an unusually long time.
With sentiment this negative I believe it would eventually set up for a potential tradable bottom or at least minimize the potential downside from current levels.
Investor sentiment is considered a contrarian indicator and when it gets overly bearish or bullish it can be a solid indication that a move in the opposite direction could be just around the corner.
Here's just some of what we were looking at...
The Put-Call Ratio
When the ratio of puts being bought gets above one it's an indication of fear in the market as investors buy portfolio protection...
The AAII Sentiment Survey
Equity Mutual Fund Flows
CNN Fear & Greed Index
Sentiment indicators are far from perfect but they should be a tool in every trader's toolbox, especially in a weak market where some of the strongest rallies happen when short-sellers start to cover their positions.
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Nothing in this blog post should be considered investment advice and is provided for educational and entertainment purposes only. The commentary and information represent the opinion of the author and are not recommendations to buy or sell any security or investment product. The author may or may not hold positions in the securities and investments mentioned. Full disclaimer here.