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Wednesday, September 06, 2017

Citigroup Panic-Euphoria Sentiment Indicator

Citigroup Panic/Euphoria Model is Citi's Measure of Investor Sentiment For Stocks. 
Chart of Citigroup's Panic/ Euphoria Model  vs SPY as of September 6, 2017:
"The panic/euphoria model is a gauge of investor sentiment.  It identifies "Panic" and "Euphoria" levels which are statistically driven buy and sell signals for the broader market.  Historically, a reading below panic supports a better than 95% likelihood that stock prices will be higher one year later, while euphoria levels generate a better than 70% probability of stock prices being lower one year later.”   Source: Citigroup's Panic - Euphoria Model 
  • My November 4, 2016 Panic/Euphoria update showed the indicator was in the "Panic Zone" and SPY was $208.88.  
  • Today at $247.84,  SPY is up $38.96 or 18.7% plus dividends.
  • Shortly after publication, I sent a BUY ALERT (copy below) to my subscribers to buy 200 shares of VWO, Vanguard Emerging Markets ETF, at $35.12.  
  • Today VWO is $42.62, up $7.50 or 21.4%
  • I try to get "more bang for the buck" trading individual stocks and sector ETFs in my Explore Portfolio as a way to get better long-term returns than buy-and-hold the S&P500 with far less risk.
  • I follow many sentiment indicators to help me decide when to take profits and add to or establish new positions.  I cover these sentiment indicators in more detail, usually the most significant one or two at the time of publication, on page 7 of my monthly newsletter.

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