Weekly Sentiment Poll – 9 Jan 2017

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, theWeekly Equity Sentiment PollusesTwitter pollingand distinguishes between whether respondents are bullish or bearish primarily on the back of fundamental vs technical analysis reasons.

The firstchartshows the trends in the responses for each of the options. The latest results show an extension of the recent trend towards more bearishness on fundamentals, yet bullishness on technicals improved (that whole, “I don’t like the fundamentals but price is going up” thing).

The overall bulls minus bears sentiment spread rebounded on the week (along with price). It has all the elements of a typical pullback in an uptrend, but it is interesting how from a quick glance it looks like the two series are diverging.

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To me, probably the most interesting charts this week were the bull-bear sentiment spreads for fundamentals and technicals – they actually moved in opposite directions (more net-bearish on fundamentals and more net-bullish on technicals).  It also continues the trend of net-bearishness on fundamentals but net-bullishness on technicals.  What should also get your attention is the seeming tendency for the fundamentals spread to act as a leading indicator (while it’s only early days for the survey, the fundamentals spread seems to lead price action at times…).

Finally, another interesting one is the overall bulls vs bears spread inverted and overlayed against theCBOE Volatility Indexor VIX. A quick glance at the chart would make you think that perhaps there’s upside in store for the VIX…

Overall the fact that the total bullish minus bearish sentiment spread ticked up from its worst level since prior to the election would make me think we’ve seen a short-term bottom in the market.  But there is plenty of fodder for the bears in the latest results e.g. possible bearish divergence, tick down in fundamentals sentiment, and the VIX chart.

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Topdown Charts: "chart driven macro insights" Based in Queenstown, New Zealand, Topdown Charts brings you independent research and analysis on global macro themes and trends. Topdown Charts covers multiple economies, markets, and asset classes with a distinct chart-driven focus. We are not bound by technical or fundamental dogma, and instead look to leverage any relevant factor to capture the theme. As such, here you will find some posts that are purely technical strategy, some that just cover economics and data, and some posts that use multiple inputs to tell the story and identify the opportunities. Callum Thomas Head of Research Callum is the founder of Topdown Charts. He previously worked in investment strategy and asset allocation at AMP Capital in the Multi-Asset division. Callum has a passion for global macro investing and has developed strong research and analytical expertise across economies and asset classes. Callum's approach is to utilise a blend of factors to inform the macro view.