{"id":20758,"date":"2023-03-29T07:30:00","date_gmt":"2023-03-29T11:30:00","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=20758"},"modified":"2023-03-29T07:30:00","modified_gmt":"2023-03-29T11:30:00","slug":"how-to-turn-investor-fear-into-opportunity","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/how-to-turn-investor-fear-into-opportunity\/","title":{"rendered":"How To Turn Investor Fear Into Opportunity"},"content":{"rendered":"

Andrew’s Note: <\/strong>Master trader Jeff Clark is predicting an opportunity decades in the making<\/a>, just weeks away…<\/p>\n

During similar events in the past, his subscribers booked gains like 1,391% in 78 days… 1,263% in 68 days… even 1,285% in just 48 hours.<\/p>\n

To help prepare you this time around, he’s hosting a free presentation on April 5 at 8 p.m. ET<\/a>. There, he’ll share a free recommendation you can start trading immediately. Simply click right here to sign up now<\/a>.<\/p>\n

And below, continue reading for Clint Brewer’s latest market analysis…<\/p>\n

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If you turn on the business news, you’ll be bombarded with predictions of economic disaster…<\/p>\n

Dire headlines of bank failures, more interest rate hikes, and stubborn inflation have soured investor attitudes toward the stock market.<\/p>\n

But this is when traders need to be the most alert for profitable opportunities.<\/p>\n

Investor sentiment works as a contrarian indicator at the extremes. So, it pays to bet against the crowd when the mood quickly becomes lopsided in one direction.<\/p>\n

And right now, the bearish sentiment is giving traders a good signal despite all the doom and gloom.<\/p>\n

Based on one key measure of sentiment, we’re approaching an extreme that has marked stock market turning points in the past…<\/p>\n

Gauging the Mood of the Crowd<\/h2>\n

When investors are collectively too bullish, there’s little additional purchasing power to push stocks higher.<\/p>\n

But when everyone is bearish, sentiment can act as dry powder for boosting stocks.<\/p>\n

Now there are many ways you can measure investor sentiment… You can track things like investor portfolio cash, where a high level indicates widespread fear.<\/p>\n

Or you can monitor how many put options<\/a> investors are purchasing relative to call options. A spike in puts means investors are rushing into downside protection, indicating more fear entering the stock market.<\/p>\n

No matter the measure, the goal remains the same: look for extreme levels of fear or greed which could indicate the potential for trend reversals.<\/p>\n

And one of the simplest indicators to measure sentiment is currently flashing a buy signal…<\/p>\n

<\/p>\n

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Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

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Are You Feeling Bullish?<\/h2>\n

If you want to reveal the mood of investors, you can also just ask them.<\/p>\n

Every week, the American Association of Individual Investors surveys retail investors and divides them into bullish versus bearish camps.<\/p>\n

You can evaluate sentiment by tracking the ratio of bulls relative to bears. <\/p>\n

Check out the indicator in the chart below over the past year, with the S&P 500 in the top panel and the bull ratio in the bottom panel…<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

Each time the portion of bullish investors has dropped to an extremely low level (green circles), the S&P 500 started to rally. Those three rallies went on to gain 12% on average in less than two months.<\/p>\n

And now, we’re once again hitting territory marked by fear (green arrow).<\/p>\n

Since peaking in early February, the S&P 500 has dropped 5%. And that’s driving a surge in bearish sentiment, with few bulls remaining.<\/p>\n

You shouldn’t interpret this reading as a signal that the bear market is over.<\/p>\n

However, the current mood shows we could see a short-term rally. And the last few times a similar bullish sentiment was cleared out, traders had big opportunities to profit.<\/p>\n

Best regards,<\/p>\n

Clint Brewer
Analyst, Market Minute<\/em><\/p>\n

<\/p>\n

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READER MAILBAG<\/h2>\n<\/div>\n

In today’s mailbag, a Jeff Clark Alliance<\/a><\/em> member thanks Jeff for his measured approach to trading…<\/p>\n

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I just want to tell Jeff how much I appreciate his measured approach to trading, i.e., not feeling compelled to publish a trade, if it’s being posted on a wing and a prayer. I’m happy to read his thoughtful summaries of why there are days it’s fine to sit on the sidelines.<\/p>\n

– Laura H.<\/strong><\/p>\n<\/blockquote>\n

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you turn on the business news, you\u2019ll be bombarded with predictions of economic disaster…<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[82],"newsletter-type":[],"ticker":[],"class_list":["post-20758","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-clint-brewer"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20758","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=20758"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20758\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=20758"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=20758"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=20758"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=20758"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=20758"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=20758"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=20758"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}