Social Intelligence, in the fast-evolving field of behavioural finance, is used by professionals in trading & investing systems to decode the crowd’s behaviour and predict market shifts.
US job openings surprised to the upside this week, as did ISM services, both coming in hot, supporting last week's manufacturing boom.
The US is expanding, and the S&P is at an all-time high, yet consumer sentiment remains at an all-time low, the biggest dichotomy ever seen, keeping macro analysts on their toes. Everyone is calling bubble, but could it actually be an AI revolution akin to the agricultural? Possibly, as we are seeing a permanent shift in communication, education, data access and how we do our jobs. This is also the thought process of someone trapped in a bubble.
Regardless, institutional bullishness remains at significant extreme greed; any higher and we get towards the 2020-2021 stock market topping levels. Still, without retail on board, all upcoming IPOs and profit taking will have thin liquidity. Retail consumers are seeing low income levels, savings reductions, record debts, disinterest in investing and are threatened by rising yields and inflation.
Bitcoin sentiment has dropped to the extreme fear threshold amid collapsing prices. Indicators and sentiment are now signalling this move as a major bottom.
Stocks have finally broken their 6-week greed streak, as momentum has ceased this week. There was little price action to support a move down in sentiment, a perfect demonstration of time’s effect on aggregate psychology.
Rational retail sentiment remains bearish, as uncertainty-volatility persists
Bearish rational individuals are starting to believe this week as they flip neutral, and the bulls marginally increase. The market opinion is split 50/50.
Bull markets are built on this doubt, not certainty
US consumer sentiment remains at all-time low, as the reality of inflation and devaluing purchasing power continues to spiral, alongside crippling savings, lower income and rising debt.
However, job openings (JOLTS) jumped to 7.618 million from March’s 6.887 million, the highest level in nearly 2 years, significantly beating expectations (~6.86–6.89M).
ISM services came in hot, showing expansion continues in the US, alongside the hot PMI’s large expansion as manufacturers expect huge demand, which services now support.
Global yield narrative has vanished again, amid elevated pressure at 2008-2011 levels. There has not been a strong reaction in either direction yet, suggesting we continue higher in the trend. Is this the new normal?
Further upside pressure will continue to hurt housing markets and debt refinancing as borrowing costs surge.
Despite rising global yields and out-of-control inflation, US rates have a 96.2% of holding steady, and a 3.8% chance of a cut, with no chance of an increase. Europe has a 97% chance of increasing rates and 3% holding steady.
Retail interest is peaking again, but remains at significant lows after the April drop-off. AI trade is leading the way, followed by stocks; everything else remains subdued. Without attention, liquidity will be very thin if the market turns around; expect huge volatility. I would like to see attention at the highs, before making any inferences of a trend reversal.
Google Trends shows consumers are trading down to cheaper products and low-cost comforts for emotional reassurance, including legacy brands and comforting home tech.
Institutions’ extreme greed remains at significant highs, as bearish positioning remains extremely low, amid continued low SPY volume. Pros have no interest in selling at these levels yet, sitting comfortably in their bullish outlook. Any more bullish and greed gets down to the 2020-2021 topping levels, where stock prices continued higher for months after.
The upcoming IPOs chart should not be overlooked, as it reflects the institutional confidence in the bull market, as angel investors think this is a good place to exit, usually targeting retail investors who are noticeably absent. SpaceX has created a tremendous amount of hype.
VIX Volatility Index is now at bullish lows, confirming a risk-on environment. Iran conflict continues, but volatility subsides; Investors' concern for the narrative has passed. If the AI bubble continues higher, which it can, the VIX could shoot right down to topping signal levels. I don’t expect it to end until we see SpaceX and Google IPOs as they want to sell into strength, not weakness.
What is really going on with sentiment and attention? I dive deeper with the nuanced social intelligence below to uncover a different story.
Whether you’re a professional, individual, trader or investor, this institutional-grade Social Intelligence analytics delivers high-conviction alpha, sharp contrarian signals and forward-thinking insights to level-up your decisions, forming an essential edge in modern trading/investment systems in the fast-evolving field of behavioural finance.
Traditional sentiment indicators, like the fear and greed index, are lagged and derived from market positioning and price movement- this is not real sentiment. My natural language processing extracts True Sentiment and Social Attention metrics, helping you spot market shifts and events before the crowd with greater accuracy — this is where institutional alpha happens.
Subscribers receive exclusive access to processed Social Intelligence Level 2 Market analysis. Adding these to your screening arsenal can significantly boost your accuracy and timing when making entry/exit investment decisions, while simultaneously working as a signal filter to help you sidestep costly fake-outs in trading.
This proprietary research is for personal and professional use only. It must not be redistributed in any form, and the author must be credited when quoted. This is for informational purposes only and is not financial advice.
Social Attention (Pros+retail) continues to grow amid Bitcoin’s collapse to new macro lows. Retail attention finally returned in volume as panic has set in, suggesting the capitulation event and the bottom is near.
True Sentiment (Natural language processing) can’t go any lower.
Bottom signal stats: AVG max upside 94.6% | AVG max downside -9.9%
Social Attention (Pros+retail) has reached inattention again, as all-time high hype fades. Retail attention spiked neutral, but has since trended back down to inattention, remaining above the recent low.
True Sentiment (Natural language processing) is extremely bearish, reflecting the consensus outlook of a market top and retracement next.
Both signals are setting the stage for higher prices.
Bottom signal stats: AVG max upside 41% | AVG max downside -7%
Social Attention (Pros+retail) remains at the lows, alongside retail inattention. This stock has done nothing for a long time; investors have moved on.
True Sentiment (Natural language processing) remains in extreme fear.
Bottom signal stats: AVG max upside 94% | AVG max downside -13%
Disclaimer: The material presented herein is for educational and informational purposes only and should not be construed as investment, trading, tax or accounting advice. Maddox Metrics is a personal website for the author to share his work and ideas. The author, newsletter or website is not registered as financial advice, financial advisor, money manager or money management of any kind. All opinions, trade ideas, price targets and risk parameters reflect personal views at the time of publication and are subject to change without notice.
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