Posts filed under “Investing”


Its pet peeve time again: Back in May 2005, we noted that Citibank’s Panic/Euphoria Model has slid into panic mode, despite markets behaving not too poorly.

This week, the market saw the Dow finally climbing above its former January 2000 peak to an all time high; it rose 171 points, or 1.5%, to reach 11,850. The S&P 500 tacked on a 1%, while the Nasdaq rose 1.8%, to 2299. The  Russell 2000 outperformed the other indexes, advancing 2%.

This can only mean one thing to the computers at Citi: WE ARE IN PANIC MODE. Proof is their Market Sentiment Panic/Euphoria Model:

Chart courtesy of Barron’s

That’s right. According to Citibank, we have slipped ever deeper into panic mode. 

I’m not one to tell either Barron’s or Citigroup how to do their business — but this has now reached the point of absurdity. I would like to hear from someone (Tobias? Mike?) how on earth we are in a form of Panic sentiment right now.

Note: I am not saying this measure has no value; But I am suggesting that either the nomenclature  or the  scale (at right of graph) is somehow off.

Since its proprietary, we do not know what this black box measures; The only thing we are faiirly certain of is that it is not accurately measuring Sentiment . . .


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