Abnormal Sentiment for an Abnormal Market: The StockTwits Sentiment Scan

SPY

Stock market sentiment continued to erode this week, with Bearish voices dominating the message stream for $SPY, an ETF which tracks the S&P 500 Index (in the chart above, blue is price, red is Bearish message flow, green is Bullish message flow). Volatility has remained persistently elevated: the S&P 500 Volatility Index ($VIX) has closed below 20.0 only two times this year. To put that into perspective, the average $VIX daily close over the entirety of 2015 was around 16.6. The bond market is acting like a safe haven again as traders are tossing aside fears of the $FED and buying long term bonds. This has pushed $TLT to yearly highs.

QQQ

The StockTwits community is still somewhat Bullish on larger technology names but bearish sentiment continues to creep in. Weekly sentiment flow hit a peak level of Bullishness on Friday in $QQQ, an ETF which tracks the Nasdaq 100 Index. Where the dip buyers making a stance? The price-sentiment dynamics show a similar story in some individual stocks like Tesla ($TSLA), Facebook ($FB), and NetFlix ($NFLX) which all experienced first an influx of bearishness and then bursts of Bullish sentiment flow as the week progressed.

TSLA

FB

NFLX

The results from the latest Stock Sentiment Screener continue to suggest we are in abnormal markets with strong opinions on both sides. Group POLAR, which tracks stocks experiencing large Bullish and Bearish message flow, contained no stocks again this week. The last time that happened was January 16th and the $VIX hit a high above 30 the next week.

Additional evidence of an abnormal market environment comes from Group RR, which tracks symbols experiencing bursts of Bullish sentiment during price increases. This is normally one of the biggest groups, but it too has been thinning out as of late with only 11 members this week.

 

Group RR: Rising Sentiment + Rising Price

This group filters the market for stocks which have a combination of rising price and rising Bullish sentiment.

RR

Investors turned their attentions to gold, which during times of market stress can take on the role of a safe haven, kind of like US T-bonds. Two gold related symbols made it into Group RR this week, including a gold-miner Rangold Resources ($GOLD) and a leveraged long ETF $UGLD. Volatility has been good for $GOLD, the stock is up 26% since January 19th.

 

Group RF: Rising Sentiment + Falling Price

This group detects stocks which are experiencing falling price and increasing Bullish sentiment.

RF

Semiconductor manufacturer Integrated Device Technology Inc ($IDTI) had a rough week, with shares falling 29% after releasing its latest quarterly earnings report on Monday afternoon. The stock has fallen sharply since making all time highs as recently as December 2015. The price decline was met with a burst of positive sentiment, perhaps as investors attempt to catch a falling knife.

IDTI

Group FR: Falling Sentiment + Rising Price:

This group finds stocks which have risen in price in the face of falling sentiment.

FR

Excelon ($EXC) has been on a tear as of late: the stock is up over 25% since making near term lows back in mid-December 2015. This week was a continuation move with prices up 11% week on week. Sentiment flow has turned slightly negative in the stock perhaps as investors take profits on such a quick move.

 

Group FF: Falling Sentiment + Falling Price

This group screens for stocks which have a combination of falling prices and increasingly Bearish sentiment.

FF

Shares in “lifestyle” consumer goods company Ralph Lauren ($RL) took a beating this week after releasing disappointing earnings on Thursday morning. The share price fell 22% week on week and the StockTwits community seemed to be on the right side of the trade on balance: 10% of message volume was Bearish vs only 4% on the Bull side.

– For the Quants you can get access to data like this using the StockTwits API.

– Make sure you follow the author of this piece MKTSTK and visit his website for more data and analysis.

 

 


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