Weekly Sentiment Update: That Is a Moderate Bull I See!

February 16, 2017
/ By Michael Comeau

Permabulls always say everyone's bearish.

And permabears always say everyone's bullish.

Neither side provides evidence for their views.

So let's see how traders are feeling into today's inauguration:

1) VIX Spread – Bullish

The 3-month VIX spread is at +3.65, which indicates traders are not very concerned with volatility

This is a bullish reading.

2) CNN Fear & Greed Index – Bullish

The Fear & Greed Index is at 80.

F&G operates on a 1-100 scale, and 80 is in extreme greed territory.

3) AAII Sentiment – Bearish

The latest AAII Sentiment Survey shows that 33.1% of individual investors are bullish, which is below the long-term average of 38.5%.

This indicator is slightly bearish.

4) CBOE Equity Put-Call – Bullish

The CBOE Equity-Put Call ratio is at 0.58 with a 3-day moving average of 0.57. This indicates higher-than-average bullishness.

5) ISE Sentiment – Bearish
The ISE Sentiment Index is at just 85 (85 calls for every 100 puts) this afternoon – which is a bearish reading. And the 10-day moving average is 77.3.

This also indicates bearish sentiment.

Conclusion

Out of 5 sentiment indicators, we have 3 bullish and 2 bearish.

Interestingly enough, the VIX spread has contracted from 5 to 3.65 over the past week, which implies that options market players are backing off their bullish bets a bit.

And the ISE Sentiment Index implies that traders are still buying plenty of downside protection, though to be fair, that indicator seems to be losing predictive value.

This could be because of Trump-related uncertainty.

So overall, traders appear moderately bullish.

Weekly Sentiment Update: That Is a Moderate Bull I See!

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