{"id":5886,"date":"2016-09-29T10:43:33","date_gmt":"2016-09-29T14:43:33","guid":{"rendered":"http:\/\/www.thet3trader.com\/?p=5886"},"modified":"2016-09-29T10:43:33","modified_gmt":"2016-09-29T14:43:33","slug":"weekly-sentiment-update-traders-are-surprisingly-bearish","status":"publish","type":"post","link":"https:\/\/blog.t3live.com\/2016\/09\/29\/weekly-sentiment-update-traders-are-surprisingly-bearish\/","title":{"rendered":"Weekly Sentiment Update: Traders Are Surprisingly Bearish"},"content":{"rendered":"

Want to Earn Serious Income With Options?<\/strong><\/p>\n

Then click here to check out Doug Robertson\u2019s special live trading event!<\/a><\/strong><\/span><\/p>\n

Permabulls always say everyone's bearish.<\/p>\n

And permabears always say everyone's bullish.<\/p>\n

Neither side provides evidence for their views.<\/p>\n

So I like regularly run through a wide variety of sentiment measures to get an accurate reflection of the market's mood.<\/p>\n

According to 7 sentiment measures I track, traders appear to be modestly bearish, even though the S&P 500 is still within a stone's throw of the 2193 all-time high.<\/p>\n

1) SPX Options Prices – Bearish<\/strong><\/p>\n

SPX options prices show a high put skew. I looked at 10% out of the money 6 month SPX options. There is currently a 9.8 point skew in implied volatilities on the options. That's the 94th percentile.<\/p>\n

So relative to calls, traders are paying more for 10% OTM 6 month puts than they have 94% of the time over the past 5 years.<\/p>\n

2) ISE Sentiment – Bearish<\/strong><\/p>\n

The ISE Sentiment Index closed at 81 yesterday (81 puts for every 100 calls). And its 10 day moving average is just 78 — a level that indicates bearishness.<\/p>\n

3) AAII Sentiment – Bearish<\/strong><\/p>\n

The latest AAII Sentiment Survey shows that 24.0% of individual investors are bullish, well below the long-term average of 38.4%, and below the 2016 YTD average of 28.1%.<\/p>\n

Bearish sentiment is at 37.1%, down a bit from last week, but well above the 30.3% long-term average.<\/p>\n

4) Wall Street Strategists – Neutral<\/strong><\/p>\n

The average year-end target price for the S&P 500 is 2169, according to Bloomberg. That implies the market does nothing into year-end.<\/p>\n

5) CBOE Equity Put-Call – Neutral<\/strong><\/p>\n

The CBOE Equity-Put Call ratio was 0.66 yesterday, which is just below the YTD average of 0.69. This points to neutral sentiment.<\/p>\n

6) CNN Fear & Greed Index – Neutral<\/strong><\/p>\n

The Fear & Greed Index is at 50.<\/p>\n

F&G operates on a 1-100 scale, and 50 is neutral perfectly neutral.<\/p>\n

7) Investors Intelligence – Bullish<\/strong><\/p>\n

Yesterday, the Investors Intelligence Survey of newsletter writers\u00a0showed a slightly increase in bullishness to 45.2%, snapping a 4-week losing streak.Those calling for correction are at 31.7%, the highest since June 29.<\/p>\n

*********<\/p>\n

So we have 3 bearish indicators, 3 neutral indicators, and 1 bullish indicator.<\/p>\n

Blend them together and you have a moderately bearish crowd.<\/p>\n

I'm hearing a lot of bears say that everyone's complacent… but who are they talking about?<\/p>\n

P.S. Don't forget to sign up for Doug Robertson's FREE options event!<\/a><\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Want to Earn Serious Income With Options? Then click here to check out Doug Robertson\u2019s special live trading event! Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. Neither side provides evidence for their views. So I like regularly run through a wide variety of sentiment measures to get an accurate reflection of the market’s mood. According to 7 sentiment measures I track, traders appear to be modestly bearish, even though the S&P 500 is still within a stone’s throw of the 2193 all-time high. 1) SPX Options Prices – Bearish SPX options prices show a high put skew. I looked at 10% out of the money 6 month SPX options. There is currently a 9.8 point skew in implied volatilities on the options. That’s the 94th percentile. So relative to calls, traders are paying more for 10% OTM 6 month puts than they have 94% of the time over the past 5 years. 2) ISE Sentiment – Bearish The ISE Sentiment Index closed at 81 yesterday (81 puts for every 100 calls). And its 10 day moving average is just 78 — a level that indicates bearishness. 3) AAII Sentiment – Bearish The latest AAII Sentiment Survey shows that 24.0% of individual investors are bullish, well below the long-term average of 38.4%, and below the 2016 YTD average of 28.1%. Bearish sentiment is at 37.1%, down a bit from last week, but well above the 30.3% long-term average. 4) Wall Street Strategists – Neutral The average year-end target price for the S&P 500 is 2169, according to Bloomberg. That implies the market does nothing into year-end. 5) CBOE Equity Put-Call – Neutral The CBOE Equity-Put Call ratio was 0.66 yesterday, which is just below the YTD average of 0.69. This points to neutral sentiment. 6) CNN Fear & Greed Index – Neutral The Fear & Greed Index is at 50. F&G operates on a 1-100 scale, and 50 is neutral perfectly neutral. 7) Investors Intelligence – Bullish Yesterday, the Investors Intelligence Survey of newsletter writers\u00a0showed a slightly increase in bullishness to 45.2%, snapping a 4-week losing streak.Those calling for correction are at 31.7%, the highest since June 29. ********* So we have 3 bearish indicators, 3 neutral indicators, and 1 bullish indicator. Blend them together and you have a moderately bearish crowd. I’m hearing a lot of bears say that everyone’s complacent… but who are they talking about? P.S. Don’t forget to sign up for Doug Robertson’s FREE options event!<\/p>\n","protected":false},"author":6,"featured_media":5888,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,1],"tags":[302,329,46,330,47,8,331],"class_list":["post-5886","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-uncategorized","tag-aaii-sentiment","tag-cboe-put-call-ratio","tag-investors-intelligence","tag-put-call-ratio","tag-sentiment","tag-stocks","tag-traders"],"_links":{"self":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/5886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/comments?post=5886"}],"version-history":[{"count":0,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/5886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media\/5888"}],"wp:attachment":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media?parent=5886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/categories?post=5886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/tags?post=5886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}