Measuring market sentiment can determine when a trend could terminate. Market price peaks usually correspond with high bullish/optimistic sentiment. In declining markets bottoms are near high bearish/pessimistic sentiment.
Long and short-term U.S. stock market sentiment entering the November trading month are at historically high bullish levels.
The weekly S&P 500 (SPX) chart courtesy of Trading View illustrates long-term sentiment.
Market sentiment can be measured in two ways; bets made by traders such as Put and Call options, or by polling. Market Vane began polling market opinions in 1964. Their Bullish Consensus is the degree of bullish sentiment for a particular market. The Bullish Consensus is compiled by tracking the buy and sell recommendations of leading market advisers and commodity trading advisers relative to a particular market. High Bullish Consensus numbers tend to correspond to market peaks, low numbers relate to bottoms.
The level for U.S. stock market potential peaks begins at 65%. The bottom level begins at 40%.
The manic SPX rally from late 2017 to January 2018 produced a very high Bullish Consensus reading of 72%. Note that this sentiment reading corresponded with the highest ever weekly SPX – RSI reading. This is a rare example of a stock market blowoff top which usually occurs in Commodity markets.
The next significant peak in September 2018 was sentiment divergence. High price with a lower sentiment reading. This was not the best type of sentiment signal for a downturn because the Bullish Consensus reading had yet to reach 65% – minimum level for a potential peak.
The peak in February 2020 was an anomaly; the reading was only 50%. The reason for the low reading was the Covid crisis which was outside the normal business cycle. If the Covid crisis had not happened, it’s likely SPX could have rallied for several months before making a significant peak.
The Covid crash did generate a very effective Bullish Consensus buy signal with a very low reading of 28%.
Sometime markets can make significant turns on the cusp of a new year. The Bullish Consensus reading of 67% just after the start of 2022 was a very effective sell signal. The low reading of 33% occurred in October a month known for significant U.S. stock market bottoms.
Late in 2024 there was a very high reading of 73%. The subsequent marginally higher SPX peak in February 2025 had a very effective sentiment divergent reading of 68%. Note that the subsequent 2025 low reading of 41% came at a higher bottom. This is an example of a bullish sentiment reading.
The most recent Bullish Consensus reading is 72%, which is the highest level since the April bottom. It’s also diverging against the 73% reading made in late 2024 with lower prices.
There of course could be higher Bullish Consensus readings above 73%, or there could be a sentiment bearish divergence weeks or months later. Beware, within the last eight – years there have been only two instances when the reading where at or above 72%. Both were preludes to declines.
The daily SPX and VIX chart updates their relationship.
This chart was illustrated in the 10/04/25 blog “Rising VIX and Rising Stocks”.
SPX peaks are made on higher VIX bottoms. VIX is composed of Put/Call options, the higher VIX bottoms are a subtle signal that some market participants are hedging with increased Put exposure.
The series of rising VIX bottoms continues. Please note that on 10/28/25 and 10/29/25 as the SPX rallied into new all-time highs the VIX also moved up.
Both long and short-term sentiment reading indicate U.S. stocks are in the area for a potential peak. The most important factor now is time.
November is statistically the most bullish month for U.S. stocks. Watch the calendar and what the stock bulls can do in November 2025.
Four Dimension Trading 