Retail Sentiment Update

This is the most recent retail sentiment update with a couple of tweets to sum up sentiment, one I find really interesting as we talk about it so much.

"everyone bearish on twitter

Here is the typical tweet:

"I bought 1/2 position in $SPY 163.50 puts/ Will add upon triangle confirnation."

Seems everyone is convinced a taper is coming."

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OK, sentiment seems clear from retail, as I said the last few days, the market has thought a September Taper was the highest probability so those 9 of 11 days down in the SPX was the market discounting that probability. If there's anything that seems to open the door in today's minutes, even something like Bernie's ambiguous "Plausible deniability" press conference answer after the last minutes were released and damage control was needed (he referred to "continued policy accommodation" which the market took to mean QE, I took it to mean extended low interest rates, but a very cunning Green-speak play on words to make the market think he meant QE as that was the topic of the moment, later the next F_O_M_C policy statement confirmed it was extended low rates), I doubt they want to see the market crash with this kind of leverage and HFT's ability to instantly pull all liquidity, so they may have been more careful this time or added something that the market can grasp on to as hope that the taper won't be as dramatic or will take longer to finish, perhaps even start later.

This is all speculation, but you see how retail is thinking. Now Leading Indicators and Pro Sentiment...

 Sentiment via FCT over the last few days vs the SPX has been positive...

Even more, look at sentiment this morning vs the SPX!

HYG is drifting lower, but still a "V" reversal and still outperforming the SPX on a relative basis.

HY Credit may not look impressive, but it's holding up and because of the low liquidity, this is the first form of credit to panic out the door at the first sign of trouble.

Junk Credit looks like HYG. It's a very strange atmosphere, all I can think of is if there's a bounce and it looks more and more like there will be, then, there was a leak of the minutes.

As far as the second issue in retail sentiment,

""I bought 1/2 position in $SPY 163.50 puts/ Will add upon triangle confirnation."

How often do I talk about every Technical trader, even a newbie of 1 month, having an absolute fascination as if it were dropped from the heavens, with TRIANGLES and the "CONFIRMATION" of the breakout of triangles? THIS IS WHY AND WHERE HEAD FAKES ARE FOUND AND IT IS RIGHT THERE IN A RANDOM TWEET, THE ENTIRE CONCEPT WE USE SO OFTEN IN ONE SENTENCE.