Weekly Equity Sentiment Poll 19 Dec 2016

The results for the weekly equity sentiment poll have just been finalized, and this report outlines some of the key charts, trends, and implications for investors As a reminder the weekly equity sentiment poll uses twitter polling and distinguishes between investor's views on equity markets that are bullish versus bearish for fundamental vs technical rationale. The poll has been going for 25 weeks now. The results this week are particularly interesting...

The first chart shows the weekly responses across the 4 options. What sticks out to me is how the "fundamentals" options both seem to exhibit trending behaviour (vs technicals swinging around a bit more - as you might expect). So it is notable that after a period of "bullish fundamentals" trending up and "bearish fundamentals" trending down -- both seem to have reversed that trend with the latest results.

It's even clearer on the supplementary charts below which show the bulls-bears spread for fundamentals and technicals separately. The fundamentals bull-bear spread has a strong upturn through October and November, only to sharply turn down with the latest results (perhaps this reflects the impact of the Fed rate hike on investors's assessment about the fundamentals). Albeit at this point, the positive technicals vs fundamentals spread shows that investors are primarily focused on technicals at the moment, and the bull-bear spread for that remains positive.

Bringing it into context, the chart below shows the overall bull-bear spread for the survey against the S&P500. What's interesting about this chart is that often it seems that the poll results will slightly lead the market (which is to say perhaps my Twitter followers are clever folk!). So when you see the somewhat out-sized tick down in the survey, it could be warning of a little more downside to come.

Overall, after running the survey for 25 weeks (by the way, I usually run the survey just after I publish the weekly S&P500 #ChartStorm), I can say that it is already providing some very interesting insights. I had a hunch that there would be some interesting results by forcing people to pigeonhole themselves into the bullish/bearish and fundamentals/technicals camps - and hopefully people are getting use out of the survey. But 25 weeks is but a blink of an eye in the history of markets, so let's see how the next 25 weeks go - I have a feeling some even more interesting insights will come out of it.

To participate in the survey, please follow and watch for the survey on Sunday morning NZ time (Saturday evening in the USA).

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