Market sentiment

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The market sentiment is the intuitive feeling of the investment community regarding the expected movement of the stock market. For example, if market sentiment is bullish, then most investors expect an upward move in the stock market.

There are various technical and statistical methods used to measure market sentiment such as advancing versus declining stocks, new highs versus new lows. The importance of market sentiment perhaps is shown by Thomas Dorsey in his book Point and Figure Charting, where he states that market direction has a "66% influence on the overall movement of an individual stock. As in, all boats float or sink with the tide.