O'Reilly logo

Technical Analysis Plain and Simple: Charting the Markets in Your Language, Third Edition by Michael N. Kahn - CMT

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

16. Sentiment

The least-understood area of analysis is sentiment analysis. This covers such areas as degree of speculation, public opinion, and consensus. It is measured by relative activities in speculative instruments, such as options and polls of bullish opinions. Both rely on the “burning match” theory in which the flame is passed from investor to investor until there is nobody left to take the match. The last one holding it gets burned, literally.

In the markets, as bullish opinion spreads, eventually everyone will have bought. There will be nobody left to whom the last investors can sell. No demand means the end of the rally. This can also be measured subjectively in the media, as glowing bullish news is reported only when the ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required