Wall of Worry

Passive Should Never Laugh At Active

"The fact that fully invested passive managers are doing over-the-top-victory-dances in the end zone should come as no surprise. This is the kind of behavior we should expect at the top... The Market Gods are not a lenient bunch. They have a way of knocking down the cockiest among us."

What Wall Of Worry? Goldman Finds Investors Are "Unusually Bullish"

In the context of the acceleration in the equity rally over the past two months, index option positioning is evidence of a crowded equity market and a negative sign for stocks over the next month. Following similar positioning over the past five years, returns were -1.9% below average in the subsequent month.

Credit Investors Are Suddenly Extremely Worried About Central Banks

The latest credit investor survey by Bank of America shows a marked change in the Wall of Worry: "Quantitative Failure" by central banks has emerged as investors’ top concern (23%), up materially from June’s reading (6%). Investors say that a backdrop of the ECB ending QE next year, while inflation remains sub-par, "has the potential to rattle the market’s confidence."

Even Schwab Is Warning Retail Clients Of "Danger Signs Rising"

"A solid earnings season should contribute to a continuation of the bull market in stocks. Dangers are lurking, however, and the possibility of a decent-sized pullback has grown over the past couple of months, in light of monetary policy and geopolitical uncertainties. "

No More "Cash On The Sidelines": Private Client Cash Levels Drop To Record Low

According to the latest BofA flow show report, private client cash - i.e., high net worth individuals who still allocate capital to single-stocks and ETFs on a discretionary basis - is now at a record low, taking out the cash levels observed in the period just prior to the last market peak in 2007.