Barron’s popular Electronic Investor column published last month a brief article on MarketGrader.com’s sentiment indicator and how we aggregate all companies’ scores of the same into our MarketGrader Sentiment Index. For those who missed it, we first introduced our Sentiment Index, which we’ve dubbed MGSI, in early October when the stock market hit its 2011 lows as measured by the S&P 500, the Dow Industrials and, of course, the Barron’s 400 Index. The S&P 500 closed the prior day at 1,099.23 while the Dow closed at 10,655.30. The Barron’s 400 closed at 268.51 on October 3rd. Our article, which was also published on Seeking Alpha, garnered a good deal of attention and prompted many of our readers and subscribers to ask us for a place in MarketGrader.com where they could follow the new MGSI. We complied and launched our new MGSI page also last month, which you may view here.
For those who didn’t catch the Barron’s article, published in the December 24th issue, you may read it here.
As for the MarketGrader Sentiment Index itself, we’d like to note that last night the index crossed the 1.5 mark for the first time since May 2011, which put its Market Call (based on the MGSI overall value) in ‘HOLD’ territory. For a better understanding of how MGSI works and what it means, please refer to our original October article, which you may read here. Since our October call, through last night’s close, the S&P 500 is up 16.2%, the Dow is up 16.5% and the Barron’s 400 is up 21.2%. Investors concerned about the market’s ongoing volatility, particularly given Europe’s lingering debt woes and looming recession, would be well served to check the MGSI periodically as a gauge of overall investor optimism or pessimism as we continue to toggle between risk-on and risk-off.