How Market Mood Works
Market Mood uses moving average analysis to classify the trend of any stock, ETF, or cryptocurrency into one of five sentiment levels. It's a data-driven, objective way to understand what the market is doing — no predictions, no opinions, just math.
What Are Moving Averages?
A moving average (MA) smooths out price data by calculating the average closing price over a set number of days. Instead of reacting to every daily price swing, it reveals the underlying trend.
Simple Moving Average (SMA)
Calculates the arithmetic mean of closing prices over a period. All days are weighted equally. More stable, slower to react.
Exponential Moving Average (EMA)
Gives more weight to recent prices. Reacts faster to new data. More sensitive to recent market moves.
We use combinations of short-term (faster) and long-term (slower) moving averages. When the short-term average crosses above the long-term average, it signals upward momentum — and vice versa.
The 5 Moods
Every asset we track is classified into one of these five sentiment levels, updated daily based on the latest closing prices.
Price is well above key moving averages, and short-term averages are above long-term averages. The trend is clearly upward with strong momentum.
Price is above key moving averages. The trend leans upward, though momentum may be moderate.
Price is near its moving averages with no clear directional trend. The market is undecided or consolidating.
Price is below key moving averages. The trend leans downward, though the decline may be moderate.
Price is well below key moving averages, and short-term averages are below long-term averages. The trend is clearly downward with strong momentum.
How Mood Changes Work
When the relationship between price and its moving averages shifts, the mood changes. For example:
Price has crossed above its key moving averages, indicating the trend may be reversing upward.
Price has fallen below its key moving averages, indicating the trend may be reversing downward.
Price is consolidating near its moving averages, with no clear directional signal.
Mood changes don't happen often — most assets stay in the same mood for days or weeks. When they do change, it can signal a meaningful shift in trend direction.
What Market Mood Is Not
Not a prediction. Market Mood tells you what the trend is, not what it will be.
Not a buy/sell signal. A bullish mood doesn't mean "buy" and a bearish mood doesn't mean "sell."
Not sentiment analysis. We don't analyze news, social media, or opinions. Only price data and math.
It's a trend indicator. A factual, objective snapshot of where an asset's price sits relative to its historical moving averages.
Educational content · Not investment advice or recommendations
We're educators, not advisors. Your decisions are your own. Disclaimer