Wall Street Sentiment
"The most profitable and useful sentiment on Wall
Street for more than a decade. Period."
"Some of the most valuable information I get is from Mark Young's
weekly sentiment polls. He not only provides the raw sentiment
numbers, but he also performs a remarkably insightful and accurate
analysis of the poll results. I would hate to be without it."
"The service is a very handy tool to have in one's
trader's toolbox. [Mark Young's] special take on sentiment can help
you on the right side of the indexes, even with the seemingly
irrational moves we've had since 2000."
New York City, NY
"I have been trading the
markets since the early 1970's and have tried just about everthing out
there..with very very modest success...that said..i can tell you that I
find your "senticator".. the most accurate..and simple to use technique
for predicting the near term direction of the S & P index.....this
is stated with a deep sense of thanks to you for presenting this
product... you have my heartiest congratulations."
"Mark Young's serviceis an invaluable sentiment service. Using it with
other indicators can give the fine edge to making a successful trade,
and passing on a bad one."
New York City, NY
"Mark, just wanted to
send you a quick complimentary note on the service. Most of my market
analysis prior to Aug. 2003 has dealt with classic TA and price action.
I've thought about investor sentiment and crowd psychology over the
years, but never followed a quantifiable, "for pay" service until
subscribing to your service [Trade Navigator]. I like it. I feel that
helps give me a more complete "feel" for the equity market. Please make
sure that I'm rolled into the new premium service and keep up the great
What's Included in Your Subscription:
||The Daily Trade Navigator subscribers get a
daily update of our proprietary surveys, all the major public sentiment
polls and surveys (including any newly developed public sentiment polls
that catch our eye), Rydex Sentiment, standard options Put/Call ratios,
$-weighted Put/Call ratios, our Senticator and trading models, our T-4
indicator, plus in-depth analysis of all sentiment measures. No one
else can provide the depth and breadth of our sentiment research.
||If you are less active and more interested in major turns and
their likelihood, we publish a weekly version of the letter, called the
including all of the above, only on the weekend, without daily updates
||If you are a very active trader and are looking for
day-trading and position-trading ideas, our Premium upgrade
will get you a morning update with our best trading bets (long or
short) for the Emini, and trade set ups, including potential entry and
exit points, as we see them. In addition, we'll provide specific day
and position trades, real time, as time allows.
The following are the Sentiment Indicators included
ISA Weekly, Daily, and Premium Services:
The Wall Street Sentiment Survey
Each week, we conduct a survey of a static list of diverse traders.
This survey group has seen only very modest changes over the past 15
years. When a participant leaves the survey group, he or she is
replaced with a trader/analyst with a similar style and approach. As a
result of these constraints we are able to gain much more from the
survey results than one might from a typical poll. Extreme readings
often are contrary indicators, but because the surveyees are more
expert, most readings are not contrary, especially short-term.
Additionally, we've found that even splits are often good early warning
signals for market turns.
Smart Money Survey
Each week, we conduct a survey of professional analysts/investors who
have a proven record of accuracy. This is not a contrary indicator.
This crew has proven themselves to be very well-versed generally on the
right side of the market.
Each week, we conduct a survey of the least sophisticated and more
emotional amateur traders/investors. This is a contrary indicator. The
most emotional traders are most likely to be wrong on the direction of
the market. Excessive readings are very reliable.
This is a proprietary indicator based upon a special survey that we
conduct. It provides specific Buy, Sell, or Neutral signals. The
signals are not contrarian and are tradably accurate for the following
week. In some contexts, this indicator has had nearly 90% accuracy.
This is the Traders-Talk Timing Tool. This is a measure of activity on
the Traders-talk message board site. This correlates amazingly well
with turning points. We (alone) review this data daily, and we know
that when we see readings north of 80 or so, we should look for a
change in trend.
Traders-Talk.com Weekly message board
This is a standard weekly poll of fairly sophisticated trading message
board participants for the week. This is a contrary indicator. If too
many are Bullish for the week, we might look for some selling, and vice
Traders-Talk.com Daily message board
This is a standard daily poll of fairly sophisticated trading message
board participants for the following trading day. This is not a
contrary indicator unless at extremes. If there are 40% Bulls and 30%
Bears, this would imply a higher bias, but if there were 55% Bulls and
18% Bears, it would imply lower prices.
Traders-Talk.com Actual Position Poll
A daily poll of participants' actual positions; Fully Long, Partially
Long, Flat, Partially Short, or Fully short. This is a contrary
indicator at extremes counter to the prevailing trend. That is to say
if there are many fully short traders in an uptrend, that up-trend is
likely to continue, near term.
Fully Long/Fully Short Ratio
Derived from the Traders-talk Actual Position Poll, we analyze poll
results for persistent trends in excess confidence (long or short).
This is a contrary indicator, and has proved to be valuable for
identifying not only intermediate-term bottoms but also market tops
when readings are below 60% or above 300%.
The following public polls and surveys are all contrary indicators:
TheStreet.com weekly poll is larger and gives a great read on
The Thrift Saving Plan weekly poll is
a very reliable read for amateur traders.
AAII's weekly poll is a
classic poll and widely followed. This poll measures longer-term
investor sentiment and often gives an early read on important tops and
The Investors Intelligence weekly survey
is also widely followed and gives a read on the sentiment of those
advising investors. This sentiment probably reflects that of some hedge
funds. It is better informed, and tends to be quite early. Persistent
excessive readings are more valuable than one or two excessive readings.
Mark Hulbert's Hulbert Stock Newsletter
Sentiment Index is another measure of established newsletter
writer's sentiment. More specifically, this measures the aggregate
level of market exposure (long or short) recommended by Hulbert's
newsletter writers. Unlike the II survey, this index measures aggregate
Lazlo Birinyi's Blogger Poll is
a new measure of market junky sentiment. Excesses seem to be indicate
the overconfidence by somewhat more sophisticated speculators and can
be quite useful.
The LowRisk.com weekly poll is
a measure of amateur speculator sentiment. These readings tend to be
predictive (contrarily) when above 60% (either Bullish or Bearish).
Rydex Asset Flows are contrary
indicators among the non-Dynamic funds and non-contrary indicators when
the shifts are large in the Dynamic funds. We've found that non-Dynamic
traders are the least sophisticated speculators (due to the trading
limitations and the higher costs). The larger Dynamic players, however,
seem to have a rather good track record over the short term and are
probably more sophisticated.
The following Options Sentiment Indicators are contrarian:
The Daily CBOE P/C ratio
measures all options speculation on the Chicago Board Options Exchange.
When enough speculators are buying calls or puts, you can often plan on
a move that makes them wrong, at least near term.
The 10-day CBOE P/C ratio smooths
out any possible aberrations in the daily data and gives rather good
intermediate term signals.
The Equity P/C ratio measures
optimism and pessimism among small, aggressive speculators. If
confirmed, this can be very predictive.
The OEX $-weighted* P/C ratio
measures not only put and call buying, but also how much is being paid
for those puts and calls. Whenever excessive amounts of money are being
paid for options, it means that the buyers are buying for the wrong
reasons and can usually be faded. This is especially true when the
nominal OEX P/C ratio is trending in the opposite direction, implying
that the smart money is fading those who are paying too much for puts
The QQQQ $-weighted* P/C ratio
also measures not only put and call buying, but also how much is being
paid for those puts and calls. Whenever excessive amounts of money are
being paid for options, it means that the buyers are buying for the
wrong reasons and can usually be faded. This is a great way of
measuring sentiment among those aggressively trading the the more
The ISE Sentiment Index uses
opening long customer transactions to calculate a sentiment index.
Opening long transactions are thought to best represent market
sentiment because investors often buy call and put options to express
their actual market view of a particular stock and this data excludes
most programmer, market maker, and similar trades, which tend to
aberrate other options sentiment measures. High readings are Bearish
and low readings are Bullish. When used in conjunction with other
sentiment measures, the ISEE is a good measure of individual speculator
Relative VIX is a measure of the amount the CBOE Volatility
Index (VIX) is deviating from its 200-day moving average. The VIX
measures the implied volatility priced into the SPX index options. When
the Relative VIX is high, it implies that too much fear has been priced
into the options, which both indicates excessive Bearish sentiment and
creates a motivation to rally the market (and profit from rapidly
declining volatility premiums). This is one of our better
The following Options Sentiment Indicators are NOT
The OEX PC ratio is a measure
of how the more sophisticated institutional traders (who dominate
trading in these options) are positioning. They tend to be right.
The OEX 10-day PC ratio gives
an intermediate-term read on how the "usually-right" "big money" is
positioning. Again, those traders tend to be right.