Short-Term Sentiment: Neutral.
Overall Intermediate-Term Sentiment: Mixed for the market.
Individual Investor Sentiment: ST Neutral. IT Neutral for the market.
Small Speculator Sentiment: ST Mildly Bearish, and IT Bearish for the Market.
Small Hedge Fund/Manager Sentiment: ST Neutral for the market and IT Bearish for the Market.
Longer-term Trend:
Bull Market Condition.
Intermediate-term Trend:
Positive. Confirmed.
Short-term (one-day) Signal:
Weak Buy from the FL/FS on Friday.
Each day we peruse a wide variety of sentiment indicators in order to asset the mood of the market. Some of these indicators, like the Wall St. Sentiment Survey (available here on StockCharts.com) are of our own creation, while others are more widely available. In all cases, we contextualize and analyze the sentiment in order to get a trading edge that few traders can match.
In order to gain further insight, we engage in trend, momentum, and breadth analysis as well each evening, so we have a technical over-lay to help us exploit our sentiment insights.
Results of the Wall Street Sentiment Survey (formerly known as the Fearless Forecaster Sentiment) taken after the close on 5/30/14:
Response was to this question: "At the end of next week will the S & P 500 close up (bull), down (bear), or unchanged/no opinion (neutral)?"
Weekly BULLS: 30%
Weekly BEARS: 45%
Our `Smart Money' Pollees were 20% Bullish and 60% Bearish.
Our "Amateur" Trader Pollees were 0% Bullish and 75% Bearish.
The Weekly Sentiment Trading Model sat flat.
Past performance should not be considered a guarantee of future returns.
Proprietary Surveys
This week, the WSS Surveyees (often right) are again leaning a bit Bearish. The "Smart Money" Traders (usually right) are also leaning rather Bearish, but again so are the "Amateurs" (usally wrong). This suggests weakness, but that it's not going to be all one way. All in all, I think this data suggests chop. Note that these surveys are of a virtually static pool of participants. The same traders and/types of traders have been participating for 18 years now with few additions or subtractions.
Message Board Sentiment:
Message Board Opinion - NEUTRAL-BEARISH.
Bulls 30%
Bears 30%
Actual Position Poll - ST NEUTRAL, IT BEARISH.
15% Fully Long
15% Partially Long
15% Partially Short
20% Fully Short.
Fully Long/Fully Short: STILL ON A BUY.
The Fully Long/Fully Short is still on a FL/FS BUY. Oddly, this could mark a top, but it doesn't have to. The 5-day is back under 200% and that's Neutral for the intermediate-term.
Options Sentiment--Daily P/C ratio: 0.89. Neutral.
10-day P/C ratio: 0.84. Neutral.
Equity P/C ratio: 0.56. Neutral.
OEX PC ratio (not a fade): 1.85. Neutral.
OEX 10-day PC ratio: 1.28. Neutral. Nearing Bullish.
ISEE Sentiment Index: 100. Neutral.
10-Day ISEE Sentiment Index: 107. Neutral.
Options Oscillator: 13. Neutral.
Relative VIX: Neutral.
Daily VIX: Sell.
CBOE:SPX: Still positive. Confirmed.
OBSG*: Buy (see Chart below).
The options rather Neutral. The VIX suggests some caution but the rest aren't much help. The OEX P/C is a bit high. That makes me suspect, just a bit, that we might get some selling on Monday. The Market Harmonics' *Options Buyers Sentiment Gauge (thank you, Tony Carrion http://www.market-harmonics.com) is on a Buy.
Most options indicators are contrary; if most folks are buying calls, we want to fade them and go short and vice versa. The OEX nominal P/C is an exception, because the OEX traders tend to be right, unless they are paying up for options (which will show up in the $-weighted data). The ISEE Sentiment Index indicator is contrarian; traditionally, over 200 is too optimistic, under 100 is too pessimistic. OBSG provided by Tony Carrion of Market Harmonics.
General Public Polls
TSP Talk came in (Thursday evening) with 52% Bulls and 32% Bears. This looks to be slightly Bearish for the market. They had 47% Bulls and 35% Bears last week.
Citigroup Panic/Euphoria Model is just flashing another Sell.
Investors Intelligence reported 58.30% Bulls and 17.30% Bears vs. 57.20% Bulls and 18.30% Bears last week. That's a few less Bulls and a few more Bears. This is still a solid Sell. We wrote a short article on the low reading and posted it on Traders-Talk, here: http://www.traders-talk.com/mb2/index.php?showtopic=153035.
National Association of Active Investment Managers (NAAIM) Sentiment Survey reported that the Median market exposure rose to 87.50% from 75.00%. The mean exposure rose some to 72.52% from 67.23%. The minimum exposure remained at 0% short. The Maximum exposure jumped to 200% long. Looks like folks generally got a bit more Bullish in the middle. Not too much help. For more on this, see our white paper here, http://www.traders-talk.com/mb2/index.php?showtopic=116382 .
AAII is showing 36.46% Bulls and 23.20% Bears. Last week, we had 30.43% Bulls and 26.40%. This is more Bulls and less Bears. This is Neutral, but nearing a Sell.
The Newsletter Advisors were just as Bullish at 58.80% (Long). This is getting up there again. The Naz advisors got much more Bullish at 31.30% (Long) vs. 6.30% (Long). This is a big jump for the Naz traders and may bring some selling. The broader market advisors aren't that Bulled up.
Lazlo Birinyi's site, Tickersense reported 32.00% Bulls and 36.04% Bears vs. 23.08% Bulls and 53.04% Bears. That's a big Bullish shift and that looks modestly Bearish to me. This is our least predictive survey.
Conclusion
Last week, I said that despite a long list of positive, we still had a few negatives, not the least of which was a "Best Fade" Sell. During the week, pretty much everything that hadn't turned up and confirmed, did. The "Best Fade" Sell didn't deliver much and it's running out of time. The VIX is in "Sell territory" and the OEX is looking a little bit like the powers-that-be might want to trade the market down, but there's not a whole lot looking particularly Bearish. Now, those Buy signals may have pretty much delivered all the buying and covering they can. If so, we're certainly overbought enough to get some selling to make the "Best Fade" Sell right. We note that this has an almost 90% likelihood of generating some Monday or maybe Tuesday.
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Mark Young
Editor
WallStreetSentiment.com
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