26 August 2025
Sentiment Overview
- It’s getting bullish out there.
- Our Risk-On/Risk-Off Heatmap sits at the 58th percentile—the most bullish reading in 8 months. Still below the 2024 high of 66, and well under the historical sell threshold of 73.
- Heatmap shifts this week: 30 bullish vs. 18 bearish.
- A growing number of indicators are near or at historical sell levels:
- 3 indicators at sell thresholds: Net Call Volume (Equities), Conference Board Consumer Confidence, and Option SKEW
- 5 close to thresholds: State Street Risk Appetite, three Hedge Fund Beta measures, and Global Equity ETF flows
- Notable outliers at the bearish extreme: US Trade Policy Uncertainty, US Economic Policy Uncertainty, and World Uncertainty. These have historically not been useful contrarian indicators for market timing.
- Hedge Fund Betas show funds adding equity exposure—now at the most bullish in 8 months. Macro hedge funds lead, but other categories are also turning bullish.
- Global Equity ETF flows were the second highest this year, brushing up against sell thresholds.
- The AAII Bull-Bear survey remains the big outlier: -14% net bearish, little changed from last week.