Permabulls always say everyone's bearish.<\/p>\n
And permabears always say everyone's bullish.<\/p>\n
Neither side ever provides evidence for their views.<\/p>\n
So I regularly run through a wide variety of sentiment measures to get an accurate reflection of the market's mood.<\/p>\n
According to 6 sentiment measures I track, traders appear to be shockingly… neutral.<\/p>\n
Seriously, when I mash all the data together, I get a crowd that looks split right down the middle between bulls and bears.<\/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 9.6 point skew in implied volatilities on the options. That's the 88th percentile.<\/p>\n So relative to calls, traders are paying more for 10% OTM 6 month puts than they have 88% of the time over the past 5 years.<\/p>\n 2) AAII Sentiment – Bearish\u00a0<\/strong> Bearish sentiment is at 27.9%,down huge from last week, and slightly lower than the 30.3% long-term average.<\/p>\n 3) Wall Street Strategists – Neutral<\/strong><\/p>\n The average year-end target price for the S&P 500 is 2171, according to Bloomberg. That implies a 1% gain into year-end.<\/p>\n 4) ISE Sentiment – Neutral<\/strong><\/p>\n The ISE Sentiment Index closed at 130 yesterday (130 calls for every 100 puts). This is a bullish reading And its 10 day moving average is just 94 — a level that typically indicates modest bearishness. So we'll call it neutral.<\/p>\n 5) CBOE Equity Put-Call – Bullish<\/strong><\/p>\n The CBOE Equity-Put Call ratio was 0.66 yesterday, which is just below the YTD average of 0.58.<\/p>\n This points to slightly bullish sentiment.<\/p>\n 6) Investors Intelligence – Bullish<\/strong><\/p>\n Yesterday, the Investors Intelligence Survey of newsletter writers\u00a0showed a slight increase in bullishness to 46.7%. This is high relative to long-term averages. Bears fell to a 3-week low to 22.8%.<\/p>\n *********<\/p>\n So we have 2 bearish indicators, 2 neutral indicators, and 2 bullish indicators.<\/p>\n Blend them together and you have a crowd that looks pretty darn neutral.<\/p>\n I'm hearing a lot of bears say that everyone's complacent… but who are they talking about?<\/p>\n","protected":false},"excerpt":{"rendered":" Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. Neither side ever provides evidence for their views. So I regularly run through a wide variety of sentiment measures to get an accurate reflection of the market’s mood. According to 6 sentiment measures I track, traders appear to be shockingly… neutral. Seriously, when I mash all the data together, I get a crowd that looks split right down the middle between bulls and bears. 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 9.6 point skew in implied volatilities on the options. That’s the 88th percentile. So relative to calls, traders are paying more for 10% OTM 6 month puts than they have 88% of the time over the past 5 years. 2) AAII Sentiment – Bearish\u00a0 The latest AAII Sentiment Survey shows that 28.8% of individual investors are bullish, well below the long-term average of 38.5%, and below the 2016 YTD average of 28.1%. Bearish sentiment is at 27.9%,down huge from last week, and slightly lower than the 30.3% long-term average. 3) Wall Street Strategists – Neutral The average year-end target price for the S&P 500 is 2171, according to Bloomberg. That implies a 1% gain into year-end. 4) ISE Sentiment – Neutral The ISE Sentiment Index closed at 130 yesterday (130 calls for every 100 puts). This is a bullish reading And its 10 day moving average is just 94 — a level that typically indicates modest bearishness. So we’ll call it neutral. 5) CBOE Equity Put-Call – Bullish The CBOE Equity-Put Call ratio was 0.66 yesterday, which is just below the YTD average of 0.58. This points to slightly bullish sentiment. 6) Investors Intelligence – Bullish Yesterday, the Investors Intelligence Survey of newsletter writers\u00a0showed a slight increase in bullishness to 46.7%. This is high relative to long-term averages. Bears fell to a 3-week low to 22.8%. ********* So we have 2 bearish indicators, 2 neutral indicators, and 2 bullish indicators. Blend them together and you have a crowd that looks pretty darn neutral. I’m hearing a lot of bears say that everyone’s complacent… but who are they talking about?<\/p>\n","protected":false},"author":6,"featured_media":4098,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,1],"tags":[302,314,46,346,47,8],"class_list":["post-5981","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-uncategorized","tag-aaii-sentiment","tag-donald-trump-drug-stocks","tag-investors-intelligence","tag-market-sentiment","tag-sentiment","tag-stocks"],"_links":{"self":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/5981","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=5981"}],"version-history":[{"count":0,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/5981\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media\/4098"}],"wp:attachment":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media?parent=5981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/categories?post=5981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/tags?post=5981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThe latest AAII Sentiment Survey shows that 28.8% of individual investors are bullish, well below the long-term average of 38.5%, and below the 2016 YTD average of 28.1%.<\/p>\n