A sentiment indicator is a tool used to gauge the emotional tone or sentiment of a market, stock, or economic environment, often derived from various data sources such as social media, news articles, or surveys. It aims to quantify feelings of optimism or pessimism among investors, helping to predict potential market movements and behaviors. These indicators can include metrics like the Volatility Index (VIX), the Put/Call ratio, or sentiment analysis algorithms that assess the overall mood of market participants.