Gauge Sentiment Correctly


Moderate sentiment in a market that is strongly trending may be a more
reliable indicator of a probable continuation of the price move than a
high/low sentiment reading is of a reversal. In other words, extreme sentiment
readings can often occur in the absence of major tops and bottoms, but major
tops and bottoms rarely occur in the absence of extreme sentiment readings
(current or recent).

-Jack
Schwager, from

Schwager on Futures: Technical Analysis
(1996, John
Wiley & Sons, New York). 2/1/01