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 very, very neutral, 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 9.6 point skew in implied volatilities on the options. That's the 86th percentile.<\/p>\n So relative to calls, traders are paying more for 10% OTM 6 month puts than they have 86% of the time over the past 5 years.<\/p>\n 2) AAII Sentiment – Bearish<\/strong><\/p>\n The latest AAII Sentiment Survey shows that 25.5% of individual investors are bullish, well below the long-term average of 38.5%.<\/p>\n But what's really interesting is that bullishness has been below the long-term 38.5% average for 49 straight weeks!<\/p>\n 3) ISE Sentiment – Neutral<\/strong><\/p>\n The ISE Sentiment Index closed at 65 yesterday (81 puts for every 100 calls). And its 10 day moving average is just 101 — a level that indicates a neutral mood.<\/p>\n 4) 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 the market rises 1% into year-end.<\/p>\n YAWN!<\/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 48.<\/p>\n F&G operates on a 1-100 scale, and 50 is neutral.<\/p>\n So it's basically right in the middle.<\/p>\n 7) Investors Intelligence – Bullish<\/strong><\/p>\n Yesterday, the Investors Intelligence Survey of newsletter writers\u00a0showed a slight decrease in bullishness to 46.1%.<\/p>\n This is still a positive reading.<\/p>\n *********<\/p>\n So we have 2 bearish indicators, 4 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 I just don't see it.<\/p>\n","protected":false},"excerpt":{"rendered":" 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 very, very neutral, 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 9.6 point skew in implied volatilities on the options. That’s the 86th percentile. So relative to calls, traders are paying more for 10% OTM 6 month puts than they have 86% of the time over the past 5 years. 2) AAII Sentiment – Bearish The latest AAII Sentiment Survey shows that 25.5% of individual investors are bullish, well below the long-term average of 38.5%. But what’s really interesting is that bullishness has been below the long-term 38.5% average for 49 straight weeks! 3) ISE Sentiment – Neutral The ISE Sentiment Index closed at 65 yesterday (81 puts for every 100 calls). And its 10 day moving average is just 101 — a level that indicates a neutral mood. 4) Wall Street Strategists – Neutral The average year-end target price for the S&P 500 is 2171, according to Bloomberg. That implies the market rises 1% into year-end. YAWN! 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 48. F&G operates on a 1-100 scale, and 50 is neutral. So it’s basically right in the middle. 7) Investors Intelligence – Bullish Yesterday, the Investors Intelligence Survey of newsletter writers\u00a0showed a slight decrease in bullishness to 46.1%. This is still a positive reading. ********* So we have 2 bearish indicators, 4 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 I just don’t see it.<\/p>\n","protected":false},"author":6,"featured_media":4093,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,1],"tags":[302,365,346,30,47,8,9],"class_list":["post-6216","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-uncategorized","tag-aaii-sentiment","tag-cnn-fear-greed","tag-market-sentiment","tag-options","tag-sentiment","tag-stocks","tag-vix"],"_links":{"self":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/6216","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=6216"}],"version-history":[{"count":0,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/6216\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media\/4093"}],"wp:attachment":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media?parent=6216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/categories?post=6216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/tags?post=6216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}