Market Sentiment Extremes

Is a theme too excited, too depressed, or broadly normal? Scored from −100 (deeply depressed) through 0 (normal) to +100 (euphoria risk), built from momentum, participation, valuation, stress, macro and concentration.

How Market Sentiment Extremes works

Market Sentiment Extremes measures whether a sector or custom stock theme is in euphoric or depressed territory. It scores the theme on a scale from −100 (deeply depressed) through 0 (normal) to +100 (euphoria risk) across eight components: price momentum extremes, participation breadth, valuation stretch, speculative activity, fundamental gap (price divergence from fundamentals), market stress levels, macro pressure, and concentration risk. The tool also outputs separate euphoria and depression indexes so you can see which side is dominant.

Why sentiment extremes signal opportunity and risk

Extreme sentiment is mean-reverting. A theme scoring +80 has priced in near-perfect execution — leaving little room for disappointment and significant room for disappointment-driven selloffs. A theme scoring −70 may have overcorrected, as forced selling, sentiment capitulation, and ignored fundamentals create potential for recovery. Quantifying what often feels subjective helps separate temporary sentiment-driven moves from genuine fundamental deterioration.

Example

Select the AI & Semiconductors theme to see whether current enthusiasm in the sector has reached euphoric territory across momentum, participation, and valuation dimensions — or choose a beaten-down sector like Regional Banks to assess whether sentiment has overcorrected and a recovery setup is forming.

Disclaimer: Theo Capital provides educational analysis only. Sentiment scores are model-generated estimates and do not predict future price movements. This tool does not constitute investment advice or a recommendation to buy or sell any security.