Citigroup's Panic / Euphoria Model as of January 13, 2018 is at 0.52. This is the second week in the "Euphoria Zone" after spending more than two years moving up from many months in the "panic zone" when SPY and the S&P500 where much lower.
Citigroup Panic/Euphoria Model is Citi's Measure of Investor Sentiment For Stocks.
Citigroup's Panic/ Euphoria Model vs SPY
From "Citigroup's Panic - Euphoria Model": "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.”
It is not surprising that sentiment has soard. All four of the major US markets closed Friday at new record highs with the NASDAQ and S&P500 making new record closing highs every day but one this year.
- My November 4, 2016 Panic/Euphoria update showed the indicator was in the "Panic Zone" and SPY was $208.88.
- Today at $277.92, SPY is up $69.0 or 33.1% plus dividends.
- The Panic/Euphoria Model is but one of many indicators I monitor. To read about more that I use, read my Feb. 11, 2016 article "With SPY Down 14% Again, Sentiment Charts Suggest Another Tradable Low."