Time horizon and regime dependence

The same reading behaves differently across horizons and regimes.

Time horizon and regime dependence

| Concept | Explanation | |---|---| | Short-term sentiment | Often reacts to headlines, flows, leverage, and positioning. | | Medium-term sentiment | Influenced by earnings revisions, policy expectations, and market leadership. | | Long-term sentiment | Can reflect structural confidence, valuation regimes, or secular narratives. | | Regime dependence | The same sentiment reading can behave differently in trends, crises, or low-volatility periods. | | Historical baseline | Interpret readings relative to the asset's own history and methodology. |

Module knowledge check

  1. How does sentiment differ from fundamental analysis?
  2. Why can extreme bullish sentiment continue?
  3. What is an expectation gap?
  4. Why should sentiment indicators be compared with their own history?

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