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Overview

The Market Sentiment Analyzer combines real-time news sentiment analysis, insider trading activity, and fundamental metrics to give you a complete picture of market psychology around any ticker. This intelligence layer helps you make better decisions about directional bias and timing.

VADER Sentiment

NLP-powered analysis of recent news headlines with compound scoring

Insider Activity

Track purchases and sales by executives and major stakeholders

Fundamental Context

Analyst targets, P/E ratios, and business metrics

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How Sentiment Analysis Works

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Data Collection Pipeline

The sentiment engine follows this workflow:
1

Headline Scraping

Scrapes Finviz for the most recent news headlines about the ticker
2

VADER Analysis

Applies VADER (Valence Aware Dictionary and sEntiment Reasoner) to each headline
3

Temporal Grouping

Groups headlines by date and calculates daily average sentiment
4

Composite Score

Computes a final composite score from the last 5 days of news
VADER is specifically tuned for social media and news text, making it highly effective for financial sentiment analysis.

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Interpreting the Sentiment Score

The score is displayed as a compound sentiment value from -1.0 to +1.0:
Score RangeInterpretationVisual Indicator
+0.05 to +1.0Bullish sentimentGreen circle, positive percentage
-0.05 to +0.05Neutral sentimentOrange circle, near-zero percentage
-1.0 to -0.05Bearish sentimentRed circle, negative percentage
Example Scores: 
+0.45 (45%) = Very bullish news cycle
+0.12 (12%) = Mildly bullish
 0.02 (2%)  = Neutral
-0.18 (-18%) = Mildly bearish
-0.52 (-52%) = Very bearish news cycle
A score above +0.20 or below -0.20 indicates strong directional sentiment. Use this to validate or question your trading thesis.

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Sentiment Score Calculation

VADER analyzes each headline and returns four scores:
  • Positive: Proportion of positive words
  • Negative: Proportion of negative words
  • Neutral: Proportion of neutral words
  • Compound: Overall sentiment (-1 to +1)
The system uses the compound score for each headline, then:
  1. Groups headlines by date
  2. Calculates mean sentiment per day
  3. Filters to last 5 days
  4. Computes final average
Example:
Day 1: +0.30 (3 bullish headlines)
Day 2: +0.15 (mixed headlines)
Day 3: +0.25 (2 bullish headlines)
Day 4: -0.10 (1 bearish headline)
Day 5: +0.20 (bullish headline)

Final Score: (+0.30 + 0.15 + 0.25 - 0.10 + 0.20) / 5 = +0.16

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Recent News Headlines

The panel displays the 4 most recent headlines scraped from Finviz: 
"Apple announces record quarterly earnings, beats estimates"
"Concerns over supply chain disruptions impact guidance"
"Analyst upgrades AAPL to Buy with $200 target"
"CEO Tim Cook discusses AI integration in products"

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How to Use Headlines

Identify Catalysts

Look for earnings announcements, product launches, or regulatory news

Gauge Tone

Are headlines using words like “surge”, “beat”, “upgraded” (bullish) or “miss”, “concern”, “downgrade” (bearish)?

Spot Disagreement

If headlines are mixed but score is strongly directional, dig deeper

Check Recency

Headlines are sorted by recency. Old positive news may not matter if recent news is negative
The sentiment analyzer typically captures 10-20 headlines from the past 5 days, depending on ticker activity.

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Insider Trading Activity

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Why Insider Activity Matters

Insiders (executives, directors, major shareholders) have privileged information about company health. Their trading patterns can signal:
  • Heavy buying: Insiders believe the stock is undervalued
  • Heavy selling: Potential concerns, or routine portfolio rebalancing
  • Unusual activity: Signals before earnings or major announcements
Insider selling is less meaningful than buying. Executives sell for many reasons (diversification, taxes, personal expenses), but they typically only buy when they’re confident.

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Insider Metrics Panel

Two summary metrics show aggregate activity: Insider Purchases (Green badge) 
Number of purchase transactions in recent period
Example: 5 purchases
Insider Sales (Red badge) 
Number of sale transactions in recent period
Example: 12 sales
Interpreting the Ratio:
  • More purchases than sales: Bullish signal
  • Balanced: Neutral (routine activity)
  • Heavy sales: Potential concern (or routine diversification)

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Top Insider Transactions

Displays the 3 most recent insider trades with details: 
Tim Cook (CEO)
+50,000 acciones

John Smith (CFO)  
-25,000 acciones

Jane Doe (Director)
+10,000 acciones
What to Look For: ✅ Bullish Signals:
  • Multiple insiders buying (especially C-suite)
  • Large purchase sizes
  • Purchases near 52-week lows
⚠️ Neutral Signals:
  • Routine 10b5-1 plan sales (pre-scheduled)
  • Small quantities
  • Balanced buy/sell activity
🚨 Bearish Signals:
  • Multiple insiders selling simultaneously
  • Unusual selling by CEO or CFO
  • Large sale sizes during “quiet periods”
Cross-reference insider activity with the sentiment score. If insiders are buying heavily while news is bearish, that’s a contrarian bullish signal.

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Fundamental Context Panel

The Contexto tab provides key fundamental metrics:

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Business Summary

What it is: First 300 characters of the company’s business description How to use it:
  • Understand the company’s sector and industry
  • Identify cyclical vs. defensive characteristics
  • Gauge business model complexity
Example:
"Apple Inc. designs, manufactures, and markets smartphones, 
personal computers, tablets, wearables, and accessories 
worldwide. The company offers iPhone, Mac, iPad..."

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Pricing and Analyst Data

MetricDescriptionHow to Use
Current PriceReal-time spot priceStarting point for strike selection
Target MeanAverage analyst price targetGauge upside potential
Target MedianMedian analyst price targetLess influenced by outlier targets
RecommendationConsensus ratingbuy, hold, strong_buy, sell, etc.
Example Interpretation: 
Current Price: $180
Target Mean: $210
Target Median: $205
Recommendation: Buy

Analysis: Analysts expect +16% upside. Consider bullish strategies.
If target mean is significantly above current price, that supports bullish strategies like bull put spreads. If target is below, consider bearish strategies.

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Valuation Ratios

Forward P/E
  • Price-to-earnings based on next 12 months’ expected earnings
  • Lower P/E = more value, Higher P/E = growth premium
  • Compare to sector average
Trailing P/E
  • P/E based on last 12 months’ actual earnings
  • Historical context for valuation
Debt to Equity
  • Financial leverage ratio
  • Higher ratio = more debt risk
  • Important for financial sector analysis
Example:
Forward P/E: 28.5
Trailing P/E: 32.1
Debt/Equity: 1.2

Interpretation: P/E is compressing (forward < trailing), 
suggesting earnings growth. Moderate leverage.

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Real-World Use Cases

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Case 1: Confirming a Bullish Thesis

Scenario: You’re considering a bull put spread on AAPL
1

Check Sentiment

Sentiment Score: +0.22 (bullish)Recent Headlines: Mostly positive (earnings beat, product launch)
2

Review Insider Activity

Insider Purchases: 4Insider Sales: 2Top Trade: CEO bought 20,000 shares
3

Verify Fundamentals

Target Mean: 210(current:210 (current: 180, +16% upside)Recommendation: Buy
4

Conclusion

✅ All three signals are bullish→ High confidence in bull put spread strategy

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Case 2: Identifying a Contrarian Opportunity

Scenario: News is negative but fundamentals are strong
1

Check Sentiment

Sentiment Score: -0.18 (bearish)Recent Headlines: Supply chain concerns, guidance cut
2

Review Insider Activity

Insider Purchases: 7Insider Sales: 1Multiple executives buying heavily
3

Verify Fundamentals

Target Mean: Still 200(current:200 (current: 170)Recommendation: Strong BuyForward P/E: Compressed to attractive level
4

Conclusion

🎯 Contrarian bullish signal→ News is bearish but smart money is buying→ Consider bullish strategy with longer timeframe

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Case 3: Avoiding a Bull Trap

Scenario: News is positive but insiders are selling
1

Check Sentiment

Sentiment Score: +0.30 (very bullish)Recent Headlines: New product launch hype
2

Review Insider Activity

Insider Purchases: 0Insider Sales: 9CEO, CFO, and multiple directors selling
3

Verify Fundamentals

Target Mean: 150(current:150 (current: 155, -3%)Recommendation: HoldForward P/E: Elevated relative to sector
4

Conclusion

⚠️ Divergence - news bullish but insiders selling→ Avoid bullish strategies→ Consider neutral (iron condor) or skip the trade

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Advanced Sentiment Strategies

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Pre-Earnings Sentiment Check

1 Week Before Earnings:
  • Check sentiment score trend (improving or deteriorating)
  • Look for “earnings preview” headlines
  • Note if analysts are revising estimates up or down
Strategy Implications:
  • Improving sentiment → Consider long options to capture IV expansion
  • Deteriorating sentiment → Avoid or use neutral strategies

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Post-Earnings Sentiment Analysis

Immediately After Earnings:
  • Sentiment score spikes (positive or negative)
  • Headlines reflect earnings beat/miss
  • IV typically crashes
Strategy Implications:
  • Positive surprise + bullish sentiment → Bull put spreads
  • Negative surprise + bearish sentiment → Wait for stabilization
  • Mixed reaction → Iron condor to capture IV crush
The most profitable plays are often contrarian: Buy when sentiment is overly bearish (and fundamentals are strong), sell when sentiment is overly bullish (and valuations are stretched).

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Combining Sentiment with Technicals

Strong Setup: 
Bullish Sentiment (+0.25)
+ Stock at support level
+ Insider buying
= High confidence bull put spread
Weak Setup: 
Bullish Sentiment (+0.20)
+ Stock at resistance
+ Insider selling
= Avoid or wait for breakout confirmation

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Best Practices

Don't Trade on Sentiment Alone

Sentiment is a confirmation tool, not a standalone signal. Always combine with technicals and fundamentals

Weight Insider Buying Heavily

Insider buying is one of the most bullish signals. Insider selling is less meaningful

Check Sentiment Daily

Sentiment can shift rapidly. Re-check before entering trades

Compare to Historical Levels

A +0.15 score may be neutral for a volatile tech stock but very bullish for a utility

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Limitations and Warnings

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Sentiment Analysis Limitations

VADER can misinterpret sarcasm, context, or technical jargon. Always read the actual headlines, don’t just rely on the score.
Known Issues:
  • Headlines with mixed sentiment (e.g., “Stock surges despite concerns”) may score incorrectly
  • Low-volume tickers may have insufficient headlines for accurate scoring
  • Sentiment lags price action (news reports what already happened)

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Insider Activity Caveats

Not All Insider Sales Are Bearish:
  • 10b5-1 plans (pre-scheduled sales)
  • Diversification and tax planning
  • Stock-based compensation vesting
  • Personal financial needs
Delayed Reporting:
  • Insiders have up to 2 business days to report trades (Form 4)
  • The data you see may be 1-3 days old

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Fundamental Data Timeliness

  • Analyst targets may be stale (updated quarterly or after major news)
  • P/E ratios reflect recent earnings (updated quarterly)
  • Business summaries rarely change

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Troubleshooting

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”No se pudo conectar a los oraculos de sentimiento”

Cause: Network error or Finviz temporarily unavailable Solution: Wait 1-2 minutes and reload the ticker. Finviz may rate-limit requests.

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Sentiment Shows 0.00 or “No News”

Cause: No recent headlines found for the ticker Solution: Common for small-cap or international stocks. Focus on fundamentals and technicals instead.

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Insider Activity Shows 0/0

Cause: No recent insider transactions or YahooQuery API issue Solution: Not all tickers have active insider trading. This is normal for ETFs, indices, or thinly-traded stocks.

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Next Steps

Use Sentiment in Strategy Selection

Set your directional bias based on sentiment analysis

Validate with AI Analysis

Get AI-powered analysis that incorporates sentiment and fundamentals

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