• A Closer Look At Various Sentiment Indicators

    by  • February 7, 2014 10:46 am • Breaking News, Broad Market Analysis

    The charts don’t look great, but the one major positive that I see is the big spike up in fear on this recent 6% SPX dip.

    Here are some charts for your viewing pleasure.

    Active managers are panicking big time.

    Our proprietary put/call ratio of front month options on the SPY/QQQ/IWM is spiking – similar to previous SPX lows.

    Total short interest on SPX components is still near multi-year highs.

    Lastly, the Investors Intelligence poll shows those looking for a correction is above 35% again.  This is rather rare, but we did see it last June and multiple times in September (nice times to turn bullish).  Going out further, it has happened just 34 times since 1990 and you can see the results going out aren’t too bad.

    So there you go.  None of the above means the market has to rally, but my take is all of it together suggests overall sentiment is getting rather fearful.  That sets a lowered bar and makes it easier to have good news.