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Sentiment Analysis - A crucial fundamental analysis



Why HypeIndex can help


Are you looking for an edge in the markets? If so, you may want to take a look at HypeIndex. HypeIndex is an AI platform that uses news sentiment data to help you trade on market momentum. It tracks the volume of positive and negative news articles about a particular stock or index and uses this data to create a "hype" score. The higher the hype score, the more momentum the stock or index is experiencing. This can be a valuable tool for trading on news events.


What is it?


Market sentiment refers to the overall attitude of investors toward a particular stock. It’s a way to measure the tone or ‘feeling’ of a market based on crowd psychology. Warren Buffet famously said that investors should buy when others are fearful and sell when others are greedy. He may have been referring to market sentiment.


HypeIndex is a valuable tool for traders who want to get an edge in the markets. By using the hype score to trade on market momentum, you can potentially make more profitable trades.


Thanks to the proprietary market sentiment tracking tool, traders can get a broad-based overview of market health thanks to the sentiment tracker.


Why use it?


It’s been shown that following market sentiment is one of the best ways to predict the bullishness or bearishness of a stock. Stocktwits is one such platform that people often use to track sentiment, but the advantage of HypeIndex is that it’s all automated and instantly available at your fingertips.


It’s useful as a technical indicator because so much of markets is not rational, but based on feelings, emotion, and momentum. For contrarian investors, they can follow an approach to do what Warren Buffet did, buy when others are fearful. This contrarian approach has worked well in the recent market and has awarded many investors for ‘buying the dip’


Who uses it?


Intel, Twitter, and IBM are among just a few of the companies now employing sentiment analysis technologies to determine employee concerns.

IBM, for example, examines employee posts on their internal social-networking site and analyzes it for sentiment. Subjects that prove the most popular among employees are weighted most heavily.


Amazon has infamously used users data to determine interest and sentiment for their products and services.


Some examples


Most investors use the 50-day simple moving average(SMA) to determine market sentiment as well as the 200-day SMA. The point at which these two moving averages cross is called the ‘golden cross’ because it indicates that momentum has shifted to the upside.


When the 50-day SMA crosses the 200-day SMA in a bearish way, however, it’s called the ‘death cross’ and can warn investors that bad market conditions are present. A lot of market sentiment is driven by what is happening at the federal reserve.


When the federal reserve is ‘hawkish’ stocks often fall as the tone can greatly affect overall market sentiment by invoking the fear of a rate increase.


Conversely, when the Federal Reserve is ‘dovish’ the opposite is true: Markets tend to lighten up and act bullishly.


There are a lot of ways to gauge overall market sentiment, but our proprietary algorithm uses A.I and machine learning to look at a bunch of technical factors as well as social sentiment factors that might not be immediately obvious to the average investor, which is just one of the reasons why HypeIndex can help.


Our algorithm


The algorithm takes the hard work out of trying to predict and guess where a market will go and instead allows the user to sit back, relax, and allow the algorithm to figure out market direction based on sentiment while you relax on a beach somewhere in Thailand.


Nowadays, market sentiment can change on a dime. Even something as benign as a tweet from Elon Musk has the potential to cause extreme market volatility. Presidential tweets, natural disasters, covid-19 status, and a changing tone at the federal reserve are just some factors that can affect markets.


Volume can be a very useful indicator when trying to gauge market sentiment. While it doesn’t cause direction, it can give us an indication of overall investor interest. The best metrics to track sentiment vary across the type of investment: Crypto and bitcoin sentiment tracking can be very different from stocks or forex, for example.


Usually, technical analysis relies on a combination of momentum, volume, as well as average movement range to figure out where a stock might go. It’s also useful to look at the VIX, which is a sort of ‘fear index’ for wall street. The VIX can tell us the current level of fear in marketplaces. When the VIX is elevated, you can often find that the sentiment is a lot lower as investors brace themselves for market volatility and begin selling off. The market is notoriously over-leveraged, so buying put options has become fairly commonplace.


If you’re looking for a very simple and effective way to automatically trade market sentiment, look no further than HypeIndex. Stock sentiment trackers can be a very underrated and useful tool in the arsenal of a skilled investor, and our platform makes it easy for investors of all skill level to get on board with us and to make some amazing and profitable trades.

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