As time permits I've been doing a weekly post on sentiment. This is not related to pivots at all but fits into my complete market view which includes technicals (pivots primarily, with other tools), fundamentals (requires a Bloomberg), timing, and sentiment.
Of the 4 measures I track, 2 were at significant bearish extremes near the 2/11 key low. I didn't quite write it up correctly at the time, but knowing this factored into the buy recommendations on 2/12 and 2/16, the only stock index long positions I have suggested this year that weren't safe haven positions.
Sentiment continues to improve across 3 of 4 measures, with only AAII managers reducing exposure slightly from last week. Keep in mind that severe bearish extremes were reached on ISEE and AAII individuals the week of the 2/12 lows, so it would be normal for some improvement as the market stabilizes. The question is what is too much.
Again not much edge to this report; if the market breaks down I suspect we will again see extremes. Or another thing to watch for would be extremes without the market breaking, a potentially bullish setup. Or lastly, a rally with disbelief. Right now sentiment seems appropriately improved for a more stable market; but I think put-call near the low side for the year, and AAII individuals highest bull reading since last November, are both a bit optimistic.
Here's a weekly chart with a simple 10MA. As you can see the spikes were last August to October and then a much smaller spike up into mid January. The end of December finished at relative lows. The only reason I can think why 2016 is so much lower is that a significant amount of selling has been done and fewer positions to protect. Right now no real edge or even relative extreme.
The daily chart has been moving lower; much closer to lows than highs for the year. So a lot of people think drop is probably done.
ISEE data from 2005
Daily readings 2/16 had a huge daily spike which was too much optimism; recently 2/23 was below 75, not extreme. it would be normal to see a high or not much higher post 2/16 given the reading.
10MA 72% percentile, not even low end anymore (80%+)
20MA 88% percentile, low end
50MA 97% percentile
This makes sense; the shorter term readings are moving up after extremes reached 2 weeks ago. But at 72% we cannot say too optimistic; that was just 1 spike day on 2/16.
AAII mgr data from mid 2006
84% percentile, up from 75% last week.
Lower side but not extreme.
AAII individual data from 2005
bulls 76% percentile, down from 89% last week. this is obviously nowhere near a high # of bulls, but oddly is the highest reading since 11/26/2015.
bears 43% percentile, big drop from 66% then 92% before that.
bull bear spread, 62% percentile, down from 80% and then 97% extreme before that.
bull 8 week avg still 99% percentile
Like the others, a shift up from extremes reached 2 weeks ago. I would say this is a bit too bullish but sometimes the AAII individuals can be right as they were quite bearish last spring as the market was topping. So the individual data can be a bit tricky to interpret, but even this crowd will be wrong on the absolute turns like massive bearish extremes near both key lows of this year.