Bullish sentiment and FOMO are driving the markets

Wall Street went down yesterday

Tuesday has been a negative day for the US stock market.

All three major US indexes closed in a loss.

The S&P 500 finished at -0.47%, the Nasdaq closed at -0.16% and the Dow Jones closed the trading session with a loss of 0.72%.

The investors’ sentiment remains in Extreme Greed, as indicated in the graph below:

Sentiment indicator – Fear & Greed Index

The market sentiment is 79, in “Extreme Greed” mode, the same level as yesterday’s reading.

Bullish sentiment

Investors are bullish and, thanks to their buying, the financial markets are rallying.

FOMO is partially responsible for the recent rally, but the main reason why investors are continuing to buy stocks is the enthusiasm around Artificial Intelligence.

Companies like Apple, Amazon, Tesla, Meta and Nvidia are traders’ favourites because of their effort to invest in AI, which is believed to change our lives in the near future.

As a contrarian signal, however, such a high level of positive sentiment is the prelude to a market decline.

US economic data are strong: the report regarding the housing market released yesterday has shown a better-than-expected number, despite the Federal Reserve’s effort to cool down inflation (and the economy)  by raising interest rates.

What to watch today

All eyes are on Jerome Powell, the Federal Reserve President, who will visit Capitol Hill today.

He will deliver his statement regarding the economic outlook and the recent monetary policy actions to the House Financial Services Committee and the Senate Banking Committee.

Financial markets could be volatile today.

Portfolio update

I remain neutral and cautious about the stock market, especially now that the investor’s sentiment is extreme greed.

I hold long and short stock positions and aim to profit regardless of the market direction.

If you are already copying my portfolio, please keep the copy open.

If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).

Remember to copy the open trades to optimize the copy.

Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.

Thank you, everyone. Have a nice day!

Steps to follow to copy my portfolio automatically:

1. Create an eToro account here: https://federicamontella.com/go/etoro/

2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)

3. Go to my profile page: https://federicamontella.com/go/etoro-passionforprofit/

4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)

5. Enjoy, it’s all automatic. You will make passive income 24/7

Let me know if you have any questions.


Federica Montella

eToro Popular Investor


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Author: Federica Montella
eToro Popular Investor, food lover and blogger. Stock trader and Popular Investor at eToro. I am on a mission to find the best restaurants and food to eat.