Morning Notes — NDX Resistance (Day 2)

Two weeks ago, equity sentiment reached bullish extremes, with the weekly AAII poll registering its second highest level in history at 55.84.  The record bullish extreme of 59.75 was made on January 4, 2018 with the S&P 500 beginning a two-week long, -12% correction on January 29, 2018.  At best, sentiment can no longer be considered supportive.  Positioning indicators are also no longer supportive with global equities taking in record inflows of $90B over the last 3 weeks.  CTA and Hedge Fund beta now suggests above-average weighting to equities. Given the current sentiment and positioning backdrop, we’ll stay skeptical of near-term rallies based on recycled catalysts around vaccines and fiscal stimulus.