14 October 2025
Top 3 This Week
- Still Bullish despite Friday’s dip
- Tech dominates sector sentiment - very bullish, but not extreme
- Japan leads among developed markets
Sentiment Overview
- Friday’s dip showed up in sentiment indicators, but — like the market reaction — it was brief and shallow.
- The VIX jumped from 16 to 22, one of the best real-time sentiment measures. However, that remains well below buy-signal territory. Historically, a VIX at 22 has been followed by average returns over 1, 3, 6, and 12 months — no signal.
- Our Heatmap cooled only slightly to the 60th percentile, still higher than most of the summer and just below the 2024 high of 66. The historical sell threshold is 73. This zone typically corresponds to below-average 12-month equity returns.
- High-frequency indicators led the shift toward more bearish sentiment. Implied volatility and options metrics moved between the 10th and 26th percentiles — notable swings, but not historically extreme.
- The Bitcoin Fear & Greed Index provided one of the few sentiment reads available over the weekend as US–China tensions unfolded. Its track record for equity signals is short and mixed, but it’s a useful proxy when traditional markets are closed.
- Indicator changes this week: 22 moved in a bullish direction vs. 35 bearish.
- AAII Sentiment Survey: creeping more bullish each week, now 10% net bullish — near year-to-date highs, but still far below levels that flash warnings. Historically consistent with average forward returns across time horizons.
Equity Sectors
- Most bullish: Communication Services
- Most bearish: Health Care