Here’s a quick note looking at some charts created using data from the latest weekly equity sentiment poll I’ve been running. As a reminder, the Weekly Equity Sentiment Poll uses Twitter polling and distinguishes between whether respondents are bullish or bearish primarily on the back of fundamental vs technical analysis reasons.
Here’s how each of the response have been tracking over time. Bullish technicals has been trending up in recent weeks, while bearish fundamentals and technicals have both fallen off in the past couple of weeks.
As for the overall bulls vs bear spread, the below graph shows how its tracking vs the S&P500. Previously there had been some bearish divergence as the sentiment indicator fell while price was heading higher, but now there is bullish confirmation.
Looking at the bullish vs bearish spread for each of the categories, you can see the bull/bear spread has begun to rebound for both fundamentals and technicals.
Finally, here’s that sentiment vs the VIX chart – there is a clear closing of the gap, a partial resolving of the divergence, but for now it’s from the sentiment side. I mentioned this chart in the latestWeekly S&P500 #ChartStormwhich highlighted the low volatility environment and the prospect for higher volatility ahead, it also appeared in theWeekly Macro Themes, alongside some of our proprietary VIX models and indicators.
The latest results show investors becoming more bullish on balance, with the technical and fundamental bull-bear spreads rising. At present there is no real extreme in the survey and the bearish divergences seem to be resolving in a benign way, so on balance the results appear to be as expected for the type of market environment we’re seeing. That said, as noted in the latest ChartStorm, there’s still some risk warning signs out there.
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