There is a yellow flag flying on Apple(AAPL) that should caution all Apple investors to pay attention.
Astute investors know that sentiment plays a big part in the stock market. At extremes, sentiment is a contrary indicator. In plain English, very bullish sentiment is a negative indicator and a very bearish sentiment is a positive indicator.
There are a large number of established sentiment indicators related to the stock market. Such indicators range from a variety of surveys to the prices of options. One of our most successful sentiment indicators is a proprietary indicator derived from analysis of the tick trading data. We dissect this data to figure out what the smart money is doing.
We often find high correlation between extremely positive sentiment and aggressive selling by the smart money. The smart money in our parlance means collective actions of ultra-sophisticated investors who know more and who know early.
Our readers have helped us generate two interesting proprietary sentiment indicators on Apple. We write extensively and regularly on Apple. We also receive a large number of emails on Apple.
We recommended buying Apple when it was $131. For most of Apple’s rise from $131 to $300, negative emails to positive emails ran about 3-to-1. From $300 to $360, ratio of negative to positive emails was about even. From $360 to $500 positive emails were running about double the negative emails. Since Apple stock move over $500, negative emails have become extinct…Read more at Forbes
