7 August 2025
Bottom lines
- Buy-the-Dip lives on. With sentiment neutral, path of least resistance remains higher
- Dark Index tracks dark pool momentum—not investor fear
- STAX: a retail sentiment indicator that is still cautious, contrary to the market narrative
- Pound sentiment plunges—CFTC data shows a sharp turn, with bearish momentum building
1) Sentiment Today: Buy the Dip Lives On
- Friday’s sell-off was sharp—but sentiment says: keep buying the dip.
- Friday’s drop triggered a bearish sentiment shift, but it was short-lived—most losses were erased within a day.
- The VIX spiked to ~22, which historically implies slightly below-average S&P 500 returns and a 50/50 outcome—not close to a contrarian buy signal.
- Friday’s equity drop (-2.5%) followed data that raised recession risks, the equity market’s kryptonite.
- Sentiment remains muted, with most indicators near the middle of their historical ranges.
- Our Risk-On/Risk-Off Heatmap sits near the 50th percentile
- With sentiment neutral, the path of least resistance is higher—equities can grind higher unless growth expectations are materially repriced.
