Research Excerpts

Investor Sentiment: The US Stock Market

Posted on: Wednesday, June 27th, 2012

The following (green highlights) is a brief excerpt from our June 15th Sentiment Survey, which is one of 8 different reports that Asbury Research produces for subscribers throughout the month. (Samples of each report are available by clicking the link.)

Sentiment Survey is a monthly report that displays and analyzes a broad list of both asset flow- and survey-based measures of both professional and retail investor sentiment, and discusses their directional implications for the major areas of the US financial markets.

excerpt from Asbury Research’s Sentiment Survey
The US Stock Market
June 15th 2012

Chart 4 measures investor sentiment according to small retail options traders via the OCC Small Trader Buy-To-Open Put/Call Ratio, which is plotted by the blue line in the lower panel.  As the name implies, this data series includes opening positions only on small option orders of just 10 contracts or less.  A corresponding bar chart of the S&P 500 appears in the upper panel.

Chart 4

The green highlights on the chart show that these near to intermediate term oriented retail trend followers have reached an historic most bearish extreme on the US stock market that, as a contrary indicator, has coincided with or immediately led every multi-month bottom in the S&P 500 since 2006.


The chart above is one of four that appeared in the US stock market section of our June 15th Sentiment Survey, and also included the latest investor sentiment data according to brokerage and advisory firms, active Registered Investment Advisors (RIAs), and retail futures traders.

We note that the real power of investor sentiment data comes from studying multiple data series, to see how several different types of investors are collectively positioned in the marketplace, rather than focusing on just one data series as we did in our excerpt today.

Asbury Research subscribers can view the entire 12-page report, which also includes the latest investor sentiment data that pertains to US interest rates, the US Dollar, and commodity prices and the Materials Sector, by logging into our Research Center via the big gold button at the upper right corner of this screen.

Interested investors can request further information about our research by clicking here and completing the on-line form, or by calling our office at 1-888-960-0005.