Sentiment Is Too Bullish, but I'm Not That Worried

With the Fear and Greed Index tagging 95 this past week and the Daily Sentiment Index (DSI) at 89, there are two questions I have been asked repeatedly. The first is that Fear and Greed and DSI were here in mid-July and I was quite cautious in mid-July, so why aren't I so cautious now? And the second is related: what would it take to turn me cautious?

I am going to answer the two questions together. Let's start with why the market now looks different than it did in mid-to-late July, when we last saw these similar sentiment readings. Let's begin with one of the easiest charts to see the difference on: The ratio of (IWM) to (QQQ) (small-caps to big caps)....707 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.