Introduction to Sentiment and Narrative Analysis | Course 29

Hook: The Most Expensive Market Lesson

Imagine March 2020. S&P 500 drops 34% in 23 days. Twitter is on fire: “End of the world”, “Second Great Depression”. VIX at 85. Put/Call Ratio at 1.8. AAII Bears at 75%. Everyone is selling.

And then a signal appears that only 5% of traders see: DIX, the dark pool buying index, starts rising. Institutions quietly accumulate. 12 months later S&P 500 is 80% higher.

That was not luck. That was sentiment analysis in practice. And that’s exactly what you’ll learn in this course.

Table of Contents

1. Why do you need sentiment analysis?
2. What will you learn - course goals
3. Who is (and isn’t) this course for
4. Technical and mental requirements
5. Structure of 6 lessons - roadmap
6. How to study to get 100%
7. Tools you will use
8. First task - measure today’s sentiment

1. Why do you need sentiment analysis?

Technical analysis answers HOW price moves. Fundamental analysis answers WHY it should move. Sentiment analysis answers WHO is buying/selling and WHAT they feel.

In 2026, the market is no longer driven by quarterly earnings. It’s driven by:

• Elon Musk’s tweet
• A thread on Reddit WallStreetBets
• 0DTE options flow worth $1 trillion daily
• An AI narrative that pumps market cap by $2 trillion

If you ignore sentiment, you trade blindfolded.

Why it matters for traders: Sentiment gives you a timing edge. Technical indicators are lagging. Sentiment is leading. You see fear before it shows on RSI. You see euphoria before MACD diverges.

2. Course Goals - What will you be able to do after 6 lessons?

After completing the course:

Level 1 - Reading: In 5 minutes you’ll assess whether the market is in fear or greed using VIX, Fear&Greed, Put/Call, Skew.

Level 2 - Detection: You’ll detect a rising narrative on social media 2-3 weeks before its peak using LunarCrush, Santiment, Twitter.

Level 3 - Institutions: You’ll understand where big players quietly buy (DIX, dark pools) and where gamma barriers are (GEX) that will stop price.

Level 4 - Contrarian: You’ll be able to take a position against the crowd when AAII shows 70% bulls and COT shows record Commercials positions.

Level 5 - System: You’ll build your own sentiment dashboard with a BUY / SELL / DO NOT TRADE checklist and risk management rules.

3. Who is this course for?

Ideal participant:

• Trades at least 6 months, knows basics of TA
• Lost money buying the top of hype (e.g., CD Projekt at 440 PLN, BTC at $69k, AI stocks in Jan 2024)
• Wants to understand “why market behaves irrationally”
• Trades stocks, indices, crypto or options

This course is NOT for:

• People looking for “magic indicator with 100% win rate” - there is none
• Beginners who don’t know what a Japanese candlestick is
• People believing market is 100% rational

4. Requirements

Technical:

• TradingView account (free) - for VIX, Put/Call
• Access to: CNN Fear&Greed, CBOE, Squeezemetrics (DIX/GEX - free tier), AAII, CFTC COT
• Twitter/X + Reddit (for narrative observation)
• Excel/Google Sheets for dashboard
• Optional: LunarCrush account (free) or Santiment (paid, but we show alternatives)

Mental:

• Willingness for contrarian thinking - the hardest skill
• Acceptance that sentiment is probability, not certainty
• Discipline not to trade when dashboard says “do not trade” (50% of success is not trading)

5. Course Structure - Roadmap

Each lesson has: theory, tables, LaTeX formulas, example in PLN+USD, case study, exercises, beginner mistakes, checklist.

6. How to study effectively?

Rule 1: One lesson per day, no binge. Brain needs time to digest. After each lesson spend 30 min checking indicators live.

Rule 2: Keep a sentiment journal. From today daily record: VIX close, Fear&Greed, Put/Call, 1 narrative of the day. After 30 days you’ll see patterns.

Rule 3: Mental backtest. After each lesson go back to 2020 crash, 2021 bull run, 2022 crypto crash and see what sentiment indicators showed. Best learning.

Rule 4: Don’t trade immediately. For first 2 weeks only observe. Build dashboard. Paper record decisions “I would buy / sell”. Verify.

7. Tools - Your Stack

All links and setup in lessons.

8. First Practical Exercise

Before you go to Lesson 01, do now (5 minutes):

1. Go to CNN Fear & Greed Index - save current value and label (Fear/Greed)
2. Go to TradingView, type VIX - save value
3. Go to CBOE Put/Call Ratio - save value
4. Open Twitter/X, type “$SPY” or “$BTC” - what is dominant emotion? Fear? Greed? Boredom?
5. Save in notebook: “On 2026-05-13, sentiment is…”

This is your starting point. You’ll return to it after Lesson 06 and see progress.

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Ready? Lesson 01 awaits. We start from the foundation: how to measure fear using VIX and Put/Call Ratio. It will be an intense ride, but after it you’ll never look at the market the same.

What’s next?

Go to 01_fear_greed_vix_put_call_ratio.md - that’s where real fun begins.