Investor Sentiment Negative and Getting Worse

Pinnacle Digest writes: In this article, Chris Ciovacco explains the dangers looming over the stock market. Despite all the bearish news out there, particularly coming from Europe, the main issue is that investor sentiment has turned negative so quickly.

Ciovacco points to the German GDP growth, which came out better than expected, yet the DAX is having troubles holding onto any gains. As Ciovacco states “If the DAX cannot rally on better than expected news, it is not a good sign for risk assets in general.”

We’ve seen this before. The market only reacts to bearish news and disregards any positive data. This type of market behavior can last for some time. Likely the only thing to turn this sentiment around is Bernanke announcing QE3 in June.

Ciovacco explains how the VIX is showing us that fear is on the rise and that it may just be the start of an escalating concern. If Greece does in fact exit the Euro, the VIX could spike to levels not seen since 2008.

Click here to read full article from Chris Ciovacco.