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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, 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.

The first chart shows 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).

graph of bullish and bearish sentiment technicals vs fundamentals

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.

graph of bull bear spread vs S&P500

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...).

sentiment equity strategy charts (fundamentals and technicals sentiment)

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

chart of the bulls vs bears spread vs the CBOE 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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