Tags: AAII | CBOE | volatility | bullish

AAII Sentiment Survey and CBOE Put/Call Ratio Moving to Bullish Side

By    |   Tuesday, 17 Jun 2014 07:46 AM

After moving toward more neutral readings, the AAII Sentiment Survey and the 21-day moving average on the CBOE Equity Put/Call ratio have both moved toward bullish extremes in recent weeks.

The AAII Sentiment Survey from last week showed a bullish percentage of 44.7 percent and a bearish percentage of 21.3 percent. This put the ratio at 2.1, the first time this year that the ratio has been higher than 2.

Meanwhile the 21-day moving average for the CBOE Equity Put/Call ratio dropped to 0.5657 last Friday, which is the lowest reading for this indicator since Feb. 4.

With the S&P 500 rallying for the three weeks prior to last week, seeing the sentiment indicators shift toward the bullish side is to be expected. Seeing them hit multi-month extremes is the concerning part.

With stocks falling back a little last week, I wouldn't be surprised to see the indicators move off the extremes.

The CBOE Volatility Index (VIX) did move off its bullish extreme last week, thanks to the selling. The VIX was up 13.5 percent last week after hitting its lowest level in seven years.

Volatility could increase again this week with the Federal Reserve meeting on Wednesday. Investors are still learning to read the new Fed chairman and until they get a good read on Yellen, expect them to be a little on edge when there are Fed announcements.

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After moving toward more neutral readings, the AAII Sentiment Survey and the 21-day moving average on the CBOE Equity Put/Call ratio have both moved toward bullish extremes in recent weeks.
AAII, CBOE, volatility, bullish
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2014-46-17
Tuesday, 17 Jun 2014 07:46 AM
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