The 08/03/25 blog “Sentiment and Momentum Update – 08/01/25” noted that when the S&P 500 (SPX) is making a significant peak the VIX forms a higher low.
The daily SPX and VIX chart courtesy of Trading View updates the action.
SPX all-time high on 07/31/25 came with a marginally higher VIX bottom indicating a potential SPX peak.
Subsequently the VIX has made a higher bottom with the SPX making a lower peak. Is this confirmation of the 07/31/25 VIX/SPX bear signal? Possible, however, the SPX closing level on 08/08/25 was slightly below its highest closing level made on 07/28/25. This could mean the SPX needs to make a higher closing level accompanied by a higher VIX bottom.
As of 08/08/25 the message from VIX is inconclusive.
Market Vane polls the opinion of market participants to derive a Bullish Consensus. For the SPX readings above 65% indicate a significant peak could be formed. Readings below 40% indicate potential bottoms.
The weekly SPX chart illustrates long – term bullish consensus readings.
Note that in November 2024 the reading was 73% then at a higher SPX price in February 2025 the reading had dropped to 68%. This is a sentiment divergence and a prelude to the sharp February to April decline.
The reading during the week of the SPX all-time high was 65%. This is a divergence not only against the February 2025 reading but also a double bearish divergence against the November 2024 reading.
Like any potential bearish divergence there’s the possibility that the divergence could be broken. Perhaps in the coming weeks the Bullish Consensus could rise above 73%.
What gives the current sentiment readings greater importance is when they are occurring.
The next blog will examine time cycles.
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