The song (I love you) For Sentimental Reasons was recorded by Nat King Cole in 1946 and I feel as if I've been staring at my sentiment indicators for nearly that long trying to tell if equity markets are due for a bounce this week.

Survey-driven metrics such as the AAII (American Association of Individual Investors) and NAAIM (National Association of Active Investment Managers) have definitely fallen but don't appear to have fallen to levels associated with past lows in the S&P 500. The chart below shows the AAII bull-bear spread. It has turned negative for the first time since last August but it certainly hasn't reached the level seen in late August which succeeded in turning the equity market back up from its low then.

Flow-driven sentiment measures, however, are singing a different tune. These metrics appear to be pointing to a low occurring in equities now. While it's true that previous low were met with higher highs in the equity-only Put/Call ratio (5-dma), the most recent low (December) was printed coincident with a high in the ratio at this same level. Other flow-driven studies also point to a low in equities now. The percentage of NYSE stocks above their 20-dma and the percentage of NYSE stocks with their 14-dma below 30 have reached levels seen at previous lows in the broad market averages.

So what are we to conclude from all this? Time to sing a different tune? Well, maybe what is needed is a broader repertoire. Not all indicators work all the time and very few are expected to be used in isolation.

If you would like to be kept up to date with sentiment indicators and a whole lot more, try a "sneak-peek" at Seattle Technical Advisors.