Most Extreme Sentiment On Active ETFs

With the day winding down, there was no sustained bounce in the major indexes or most sectors that were hit hard at the open.

This kind of activity tends to impact sentiment, so below is a preliminary look at today's Optimism Index readings for the most active ETFs that we track.

Consumer Discretionary and Financials are near the bottom. With these raw daily figures, we typically look for something below 5 or above 95 to indicate a true daily extreme (using a moving average, the extreme thresholds are more like below 20 or above 80 for most of the funds).

Among the funds currently showing the most pessimism, the one with the most consistent tendency to snap back was Financials, XLF. The table below shows the returns if buying $100,000 of XLF on any day that its Optix closed at or below 5 and holding for the given number of days. It tended to be a short-term phenomenon only, mostly due to a number of days during 2008.