What indicators or indications, if any. are there to forewarn of changing mkt. sentiments?
Using your analogy, the sheep get startled after they are aware of the wolf's presence. I'm wondering if there are any "early wolf warning" detectors.
Well if you think about it, at it’s very basic level most of this game pivots around the interaction of expectation v/s actual & the resultant behavior of the participants.
Players are constantly pricing & re-pricing fair value, whether it be via the constant stream of intra-week economic data washing thru the pipes, or the wider inter-mkt relationships out there.
Plenty of folk will tell you all this activity is reflected in the technical bars on your charting platform, & of course it is. Technicals can certainly tip you the nod to a potential change in market sentiment & serve as pretty good risk management & timing tools.
Fundamentals (& more importantly the chatter surrounding the fundamental flavors) can often help to filter out false signals from those technical models.
Quite often, when markets become stretched & highly emotive (such as we’re experiencing of late), the slightest rumor or conjecture can spark a run on prices & cause irrational, knee-jerk behavior amongst the ranks. Confidence & trust is paramount where large wedges of money are concerned. If those key elements begin to lose their shine, it’ll quickly get reflected in excessive activity.
The indications & ‘early wolf warning’ will be visible by how you view or assimilate your regular market exposure.
Some players like to spread their information input across a varied net which might include:
personal contact with other mkt participants
squawk access
(pro) forum participation to pick up bits & pieces of flow/rumor/flavor of the day-week which certain players are focusing on
daily/weekly fundamental sheets to stay abreast of the relevant topics which are driving the market
common sense (an oft under utilized ingredient in this business)
Each player or group of players function according to their industry experience/history, aims & expectations, capital deployment & risk profiles.
I guess if someone is interested in stepping up their market (info) access exposure beyond a technical view, then there are a few alternative routes open to them.
If you want to explore that particular road, take a good look around the various sections/threads on here & get your research/inquisitive boots on to hunt down the topics of interest.