For the last nine weeks, the S&P 500 has not been able to put together back-to-back positive weeks. The good news is we haven't seen back-to-back losing weeks either.
I am fascinated by this streak, and I am wondering if it can go on for another four weeks. If it does, it would make an entire quarter with the index not moving in the same direction two weeks in a row.
This directionless market has caused the sentiment indicators to disconnect from one another.
Last week's AAII Sentiment Survey saw a drop in bulls and an increase in bears, and that brought the ratio down to 1.01. The 13-week moving average for the ratio is down to 1.31, the lowest reading since last July.
The 21-day moving average on the CBOE Equity Put/Call ratio rose to 0.6014, the highest the moving average has been since February.
The trends in the AAII survey and the CBOE Equity Put/Call ratio are both indicative of increasing pessimism.
The mixed signal comes from the CBOE Volatility Index (VIX). With the S&P 500 being up one week and down the next, you would think the VIX would be on the rise, but that is not the case.
The VIX closed at 12.91 last week, the lowest weekly closing level since the second week of January.
If the pattern holds true again this week, the S&P 500 should be down, which would mean the VIX was the better indicator — at least for a week.
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