This article reviews the data from the latest weekly sentiment survey we conduct over on Twitter. The survey measures respondents’ equity and bond positioning/view – differentiating between whether the view is bullish or bearish for technical or fundamental reasoning. The latest results were more or less in line with that of last week’s and the main takeaway in that respect is that the signals then are if anything accentuated e.g. see the bonds vs equities sentiment chart, and the VIX vs overall net-bulls.
Get The Full Ray Dalio Series in PDF
Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues
Looking at fundamentals vs technicals net bullish sentiment from the equity survey, the fundamentals net-bulls held up at the highest levels since December last year, while technicals net bulls fell slightly on the week. Basically sentiment is running at very optimistic levels on both fronts - this lines up with some of the observations in the latest S&P500 #ChartStorm --> the main theme was "greed is good".
Looking at the other two feature charts, the rolling 4-week average of net bullish sentiment for equities and bonds have traced a very interesting pattern, with bond sentiment running decisively negative in the wake of the Fed's announcement of quantitative tightening. However, the fact that equities have been tracing a similar course suggests there may be more to it than just the Fed. Meanwhile the last chart shows a potentially ominous combination of very bullish sentiment and a very low VIX...
Fundamental net bulls went sideways at solid levels, while technical net bulls ticked down on the week.
Bond bears are out in force, and equity bulls are starting to follow them...
A potentially ominous combination: a low/complacent VIX vs very bullish investor sentiment.
For institutional grade insights on the global economics and asset allocation, and some more good charts you may want to subscribe to the Weekly Macro Themes. Click through for a trial.