Callum Thomas
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Weekly Sentiment Poll: Fundamentals

The latest showed a couple of very interesting trends in sentiment and markets.  As a reminder the survey differentiates between "technicals" and "fundamentals" sentiment. The first point is the trend in the "fundamentals" net-bullish sentiment for bonds & equities.  The chart below shows the 2 lines, first thing: bond fundamentals sentiment is basically negative the whole time (bearish fundamentals - note the bond line is inverted); likewise the equity fundamentals net-bullish sentiment is also negative the whole time (i.e. respondents were net-bearish on equity fundamentals).  
But most important is the trend. The trend appears consistent for both (which makes sense: bond sentiment should most of the time be the mirror image of equities).  That is, after trending down for most of this year, there has been a noticeable upturn in fundamentals sentiment for equities lately (and down for bonds). 
The second chart shows a gap opening up again on overall net-bulls vs the VIX.  This could be called a fear gap as sentiment appears to have overreacted vs the movement in the VIX.  It could be a sign of things to come.  But it could also just be a reflection of investor skittishness - it's taking smaller price movements to affect larger shifts in sentiment.  An interesting combination given some of the signs we highlighted yesterday that stockmarket euphoria appears to be rising.
Fundamentals sentiment: both bonds and equities have net-bearish fundamentals sentiment, but there is a clear trend and that trend has gone from down to up.
The gap has opened up again between overall net-bulls and the VIX - call it a fear premium or a premonition of things to come, either way smaller price moves are seeing bigger sentiment reactions.
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