Sentiment extremes (panic ↔ euphoria)

How loud is sentiment?

ProductionVerdict · PASSRecall · 0.67

Context / Alternative view · Contrarian flag · anchor metric: euphoria / panic gauge

What it measures

A composite panic/euphoria gauge blending positioning, breadth, options and survey inputs into one contrarian sentiment reading. Euphoria flags complacency; panic flags capitulation — both are contrarian tells.

\text{PE} = \text{standardized composite of } \{\text{margin debt, put/call, short interest, breadth, surveys}\}

\text{euphoria if } \text{PE} > +1\sigma \ \cdot\ \text{panic if } \text{PE} < -1\sigma

\text{contrarian: euphoria} \rightarrow \text{caution, panic} \rightarrow \text{opportunity}

A reading deep in euphoria says the crowd is complacent — historically a contrarian caution. It's a flag, not a trigger: euphoria can persist for quarters before it matters.

Limitations

Contrarian, not timing — extreme sentiment can stay extreme.
67% (n=72) — solid as a context flag; weaker as a standalone call.

In the product

The sentiment coda of the Stress chapter (dynamic-set, resolved over candidates). CONTEXT voice normally; flips to ALTERNATIVE VIEW when it disagrees with the anchor.

Grading & stability

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Gate rate
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Stability / churn
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Mean confidence
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Graded on the Tier-1 regime-test harness — curated macro events × 18-yr backfill × recall@K. Verdict PASS (67% (n=72)).

Charts it reads

Contrarian sentiment

sentiment_contrarian—

AAII sentiment

aaii_sentiment—

Put/call ratio

put_call_ratio—

Sentiment extremes (panic ↔ euphoria) · The Lens methodology← all engines