Sentiment indicators are tools used to gauge the mood or attitude of investors and traders in financial markets. They analyze various data points, such as market trends, trading volumes, and investor surveys, to determine whether the overall sentiment is bullish (optimistic) or bearish (pessimistic). These indicators help market participants make informed decisions based on collective emotions rather than just fundamental data. Common types of sentiment indicators include the Consumer Confidence Index, Put/Call Ratio, and Market Volatility Index (VIX). By interpreting these indicators, investors can identify potential market reversals or continuations, allowing them to adjust their strategies accordingly.