Sentiment is curling up
Sentiment was extremely pessimistic over the past few weeks regardless of how you look at it. You would know this even without looking at any indicator: a 35% crash in just a few weeks is enough to make anyone panic. And now that the stock market is rebounding, sentiment is starting to back off from extreme pessimism levels.
Our proxy for the popular CNN Fear & Greed Index has escaped excessive pessimism territory (under 30) for the first time in more than a month:
The S&P's forward returns over the next few weeks and months when this happened in the past were mixed. Sometimes the post-crash rally still had more room to run, but sometimes the rally was mostly over and the stock market continued to fall:
