Where's The Money On The Sidelines? (Hint: All-In)

Tyler Durden's picture

Spend more than 10 minutes watching business television and you will undoubtedly be told that there's a lot of money on the sidelines, everyone owns bonds, and once 'some catalyst - election? fiscal cliff? year-end?' is completed then that rush of desirous greedy capital will send Tom Lee's own S&P 500 to new 'giddy' heights. Well, back here in reality-land (away from the total misunderstanding that the cash on the sidelines will always be there as the person you 'buy' your shares from is left with the same 'cash' you held before) it appears that these two charts suggest those sidelined investors are anything but. As Morgan Stanley notes, 77% of US investors are now bullish on US equities - near record highs - and if, like us, you prefer positioning (as opposed to sentiment) data, the net longs in S&P 500 futures are as high as they were in 2007 (right before the peak) and in late 2008 (right before the 27% plunge in the first quarter of 2009). But apart from that...

Sentiment...

 

Positioning...

 

Charts: Morgan Stanley and Bloomberg