| Product: | NDR Crowd Sentiment Poll - S574 |
| Run Date: | 2025-04-30 |
| Update Frequency: | Weekly |
Stock Market Chart Watch
NDR CROWD SENTIMENT POLL
The NDR Crowd Sentiment Poll is a sentiment indicator designed to highlight short- to intermediate-term swings in investor psychology. The indicator in the lower clip of the chart is a composite reading which is based on seven different individual sentiment indicators in order to represent the psychology of a broad array of investors. The indicators used are mostly based on ratios of relative bullishness or bearishness (bullish investors as a percentage of all investors) among different categories of investors, including data from:
The composite sentiment reading shows what percentage of all the investors represented by the above data can be classified as bullish on the stock market at any given time.
S574 and S574A feature two ways to utilize the data. S574 shows the levels at which sentiment peaked and troughed historically and some statistics on the average levels and spreads between peaks and troughs in sentiment.
Unlike many NDR charts, the arrows on S574 are not buy or sell signals but are only indications of where peaks and troughs in sentiment occurred and are identified only in hindsight. For a new bearish extreme to be identified, the Poll reading must rise from below 55.5 to a reading above 61.5 and have moved at least 10 percentage points in doing so. A new bullish extreme would be indicated only after the Poll falls from a reading above 61.5 to below 55.5 and falls by at least 10 percentage points. When these criteria are met, a new arrow is added at the date of the Poll's most extreme reading since the previous arrow. Thus, the arrows are not designed to be used for trading purposes, only to help identify the levels at which past extremes have occurred.
As with most of our sentiment indicators, we find that it is best to go with the flow of sentiment until it reaches an extreme and reverses, at which point we take a contrary position. When the bullish sentiment reading has risen to high levels, it has frequently coincided with an intermediate-term peak in stock prices. Conversely, when sentiment has fallen to low levels (most investors are bearish), stock prices have typically been near a bottom.
S574A shows a more traditional NDR analysis of market returns when the indicator has been in specific ranges. S&P 500 returns have been weaker when investors have been excessively optimistic (the Crowd Sentiment Poll above 66) and stronger when investors have been extremely pessimistic (the Poll below 57). The strongest returns, on average, have come when the Crowd Sentiment Poll has risen from below 57 and stayed in 57 - 66 range. This condition reflects a reversal from extreme pessimism but not the point of excessive optimism, or the sweet spot when bearish investors are coming off the sidelines, but the vast majority have not yet established bullish positions.
The NDR Crowd Sentiment Poll is useful because it aggregates several different sentiment indicators, and highlights levels at which investor sentiment has reversed in the past. It can therefore help in anticipating reversals in investor psychology, and thus stock prices, going forward.
S574 04/29/2025 04/28/2025 04/25/2025 04/24/2025 04/23/2025
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S&P 500 5560.830 5528.750 5525.210 5484.770 5375.860
NDR Crowd Sentiment 51.342 50.654 49.730 47.785 47.356