This article reviews 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 results showed a further move to the bearish side overall, with the fundamentals bull-bear spread showing a sense of capitulation after previously holding steady. The technicals net-bulls on the other hand bounced slightly, in line with price, and potentially signalling a short-term bottom.
However, the fact that bond and equity sentiment have both moved consistently (bonds more bullish, stocks more bearish - the two tend to move inversely), and the movement in the fundamentals sentiment, tends to provide some cause for caution. Again, there's a few factors in the background such as high valuations, monetary policy normalization, and negative seasonality, that tend to give a bearish bias at the moment. So it's worth finishing up by highlighting the last chart, which shows the VIX falling back down against sentiment becoming more bearish... we call this a divergence, and the gap will close, one way or another!
Fundamentals sentiment looks to be showing signs of capitulation after holding steady in a reasonably tight range for the past few weeks. Technicals net-bulls have rebounded slightly however.
Equity and bond sentiment have been moving consistently (bond sentiment more bullish, stocks more bearish) - this reverses the previously bullish risk-asset sentiment seen in July.
Seeing a sharp divergence between overall sentiment and the VIX: the VIX has reverted back down, while sentiment has become more bearish. This gap will close one way or the other.
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