Market Sentiment 05 (Nov 17 - Dec 25)

[winston]

Small Lots Put to Calls: 3x

Look no further than retail traders for a picture of pessimistic sentiment toward US equities, with bets on declines outnumbering wagers on gains by more than three to one.

Small-lot options traders -- those buying no more than 10 options contracts at a time -- snapped up $19.9 billion worth of puts to open last week while purchasing only $6.5 billion in calls to open, data compiled by Sundial Capital Research Inc. show.

“I don’t think people really appreciate what’s happening in the options market right now,” Jason Goepfert, the firm’s chief research officer, said in a tweet.

“This is the first time in history that puts were 3x calls.”

Source: Investor Place

[winston]

Markets are suddenly exuberant. Are they right to be?

“Head Fake”: the notion that a rosy batch of data suggestive of receding inflation can fuel a burst of optimism in markets, only for the dreary reality of persistent price pressures to reassert itself.

Source: The Economist

https://finance.yahoo.com/news/markets- ... 05781.html

[winston]

Traders Are Dumping Everything...

Source: Zero Hedge

https://www.zerohedge.com/markets/trade ... paign=1151

[winston]

Federal Reserve Bank of New York's Survey of Consumer Expectations ("SCE")

Just 33.9% of respondents in October expected stocks to head higher. That's only slightly more than the 33.8% low we saw in June.

And while the November figure jumped to 35.7%, it's clear that most investors are darn bearish.

The long-term average reading was more than 40%. And the high from April 2020 was nearly 52%.

They're extremely bearish – even though the market has already experienced plenty of pain.

No one sees opportunity out there... But in reality, we're getting close to an incredible chance to buy.

Source: Daily Wealth

[winston]

We Could Have 25% Upside Potential in Stocks Over the Next Year

by Brett Eversole

The IMX crashed throughout 2022. And it hit its lowest level of the year in November and December.

That was also one of the lowest readings since the index began in 2010. And in the past, similar lows have proven to be solid buying opportunities.

We just finished one of the toughest years of our lifetimes. Mom-and-pop investors are scared as a result. And that’s a bullish sign for us as contrarians.

Simply put, we have good reason to expect a 2023 recovery in stocks. Don’t get caught on the sidelines and miss it.

Source: DailyWealth.com

https://dailytradealert.com/2023/01/13/ ... next-year/

[winston]

“I can calculate the movement of the stars, but not the madness of men.”

- Sir Isaac Newton

[behappyalways]

Why 0DTE Is So Important, And Why The VIX Is Now Meaningless
https://www.zerohedge.com/markets/why-0 ... eaningless

[winston]

Money is pouring into stock ETFs at a time when bearish warnings soar

by Katie Greifeld & Vildana Hajric

More than US$12.6 billion has been sent to equity exchange-traded funds in April, the largest influx since January and more than twice the rate of February and March.

Spigots are turning back on at a time of fairly intense scepticism among the pundit class.

The S&P 500 is butting up against a level where previous attempts to break out of its sideways march have run out of steam.

“There’s a fear of missing out on an upside move”. “People are also putting money in it because some believe we can have a no landing or soft economic landing scenario".

The S&P 500 sits within about a hundred points of levels where rallies reversed themselves in February, November and September. At more than 18 times annual earnings, the index isn’t cheap, particularly with analysts expecting profits to fall in 2023.

Souurce: Bloomberg

https://www.theedgemarkets.com/node/664354

[winston]

Wall Street Needs a New Trading Adage

by DANIEL KUHN

So the market was positioned for lower prices and a weak earnings season. But what we're getting is not necessarily a weak earnings season.

It's not great, but it's not a disaster. And sometimes, if everybody's positioned on one side, that's really all it takes.

If it's just not a disaster, that's good enough to stabilize prices and get into a more normal environment. And I think we're seeing signs of that. We're seeing buyers come in on dips.

We're seeing the VIX dribble lower and these are all good signs going forward of a little more stability.

Source: The Street

https://www.thestreet.com/video/wall-st ... ng%2BAdage

[winston]

AAII Survey - Bearish Sentiment at historical readings

AAII's most recent investor sentiment survey, which asks investors where they think the stock market will be in six months, bearish responses surged to 45% over the past week, which is a historically high reading for the 30+ year-old survey. The historical average for bearish responses is 31%.

Meanwhile, only 24% of respondents were bullish on stocks, which suggests that most investors are struggling to find a good reason to invest their money into equities amid the heightened uncertainty tied to the ongoing banking crisis.

Source: Business Insider

https://finance.yahoo.com/news/theres-r ... 00044.html