JUST IN: US Consumer Sentiment Plummets to Second-Lowest Level in Over 75 Years
JUST IN: US Consumer Sentiment Plummets to Second-Lowest Level in Over 75 Years
Consumer sentiment plunged 11% this month to a preliminary reading of 50.8, the University of Michigan said in its latest survey released Friday
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This graphic is so pointless. It's extreme stupidity. Or, at best, extreme volatility for obvious reasons. Lots of other options across the whole "spedometer."
so pointless …. at best, volatility for obvious reasons.
I believe you just described “the point.”
Well, good job leaving it to me, I guess.
Sorry, I meant the point of the graph is to highlight the market’s impetus: selfishness.
Specifically, it casts investor sentiment in a negative light, where “feeling bullish” translates to “feeling greedy” and anything else is loss aversion/fear.
https://www.investopedia.com/terms/f/fear-and-greed-index.asp
The Fear & Greed Index is not just some bullshit chart, with arbitrary values, it is an index of 7 different indicators, all based on real data, all indexed together, that is to say, blended by a another formula that determines how much weight to give to each of the 7 constituent indicators.
The Fear & Greed Index Indicators
The index is based on seven underlying indicators:
Stock Price Momentum: A measure of the S&P 500 versus its 125-day moving average (MA).
Stock Price Strength: The number of stocks hitting 52-week highs versus those hitting 52-week lows on the New York Stock Exchange (NYSE).
Stock Price Breadth: Analyzing the trading volumes in rising stocks against declining stocks.
Put and Call Options: The extent to which put options lag behind call options, signifying greed, or surpasses them, indicating fear.
Junk Bond Demand: Measures the spread between yields on investment-grade bonds and junk bonds.
Market Volatility: The CBOE's Volatility Index (VIX) based on a 50-day MA.
Safe Haven Demand: The difference in returns for stocks versus treasuries.
It is presented as a speedometer... because 95% of people's eyes glaze over when they see complicated but very technically information dense graphs and graphics.
I have a decade of work experience in data analysis and reporting, making things like quarterly and annual reports for a department or entire corp or non profit, making realtime views that update based on realtime or regularly reported data...
You have to dumb things down and simplify things ... and often present data in a narrative structure, as a story, even for C Suite, upper management, the Board... because they almost always have a very low attention span.
I cannot tell you the number of times a younger, brighter eyed, bushier tailed me was... fairly politely and earnestly told by VPs or Board members that... its clear that I have a broad and deep understanding of statistics and data... but you've got to dumb these reports down to the point someone with a hangover can understand the most important information in 30 seconds.
Only other data nerds, stats nerds and accounting tend to possess the actual ability to read more complex charts without their eyes glazing over.
This speedometer presentation by CNN is pretty much the same logic used in good UI or video game design:
If some complex measurement is important and should be easily understood by the user at a glance, present that info in a simplified way that makes use of a visual metaphor or motif is rooted in something most people would have tangible experience with.
They are presenting this for the average American reader.
The average American has the literacy level of a 5th or 6th grader.
Also, it would be innacurate to describe this index as just measuring volatility.
Volatility is a component of the measurement, but there are many other components as well.... that is what an indexed metric is, a single overall 'score' produced by combining a bunch of indicators according to a set formula for how to do that.