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Tyler Durden's picture


Despite the constant clamor of money-on-the-sidelines (which Cliff Asness has summarily dismissed as being idiotic) and strength in US equity markets being 'the most unloved rally of all time', the following two charts suggest people are anything but unimpressed by it. Citi's Panic/Euphoria sentiment model has hovered in the clearly "euphoric" levels for a month and now the AAII Bull/Bear split is back near exuberant highs. Of course, as we noted yesterday, the real strength behind stocks is the incessant non-economic irrational and indiscriminate mystery buyer - corporate buybacks - that are creating their own mal-investment signaling exuberance in the always efficient stock 'markets'.


Bulls are back...


And investors are euphoric...


Seems like the perfect time to BTFATH... (or not if Citi's sentiment-based forward retur estimate is anything to go by)


Charts: @Not_Jim_Cramer and Citi


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Wed, 05/28/2014 - 13:40 | 4802437 Badabing
Badabing's picture

The charts made me bust off!



Wed, 05/28/2014 - 13:51 | 4802477 NotApplicable
NotApplicable's picture

What's an "investor?"

Wed, 05/28/2014 - 13:58 | 4802484 Aaaarghh
Aaaarghh's picture

off topic but have a peep at the fuku webcam, looks like theres clouds o' steam. Must be jetwashing the buildings

nvm, all clear, all that smoke didnt just happen and im seeing things, carry on..


Wed, 05/28/2014 - 14:25 | 4802576 Groundhog Day
Groundhog Day's picture

an investor is someone who looks at the panic/euphoria chart and concludes that their is a lot further to go on the upside if comparing to the 2000 euphoria and goes all in.  BTFATH.  The day of a massive selloff and 4000 gold for all us ZH'ers will never come.  The Computers have over taken control and does not need any retail investors anymore.  Its all about one Algo vs another algo in the matrix.  One thing i would love to know if someone has the information is: what is the volume of the market if HFT's are taken out of the numbers?

Wed, 05/28/2014 - 13:37 | 4802438 q99x2
q99x2's picture

Catherine Austin Fits says the economy is getting better, Kyle Bass says buy US bank stocks and Charles Huges Smith says 7 1/2 more years till the next bubble bursts.

BTFD M'Fr's.

Wed, 05/28/2014 - 13:37 | 4802439 CrashisOptimistic
CrashisOptimistic's picture

To be sure this article from yesterday evening is seen:


Marc Andreessen in bitcoin for the long run

Wed, 05/28/2014 - 13:47 | 4802467 BrosephStiglitz
BrosephStiglitz's picture

I like Bitcoin right now..  But in the long-run it is a bug looking for a windshield.

The technology will survive, bitcoin will not.

Wed, 05/28/2014 - 13:37 | 4802440 orangegeek
orangegeek's picture

Nothing euphoric about much out there.


The only thing that is euphoric is the spelling of the word on the above charts.

Wed, 05/28/2014 - 13:48 | 4802463 BrosephStiglitz
BrosephStiglitz's picture

The Ben Bernank:
"I love it when a good ZIRP comes together."


Wed, 05/28/2014 - 13:51 | 4802471 what's that smell
what's that smell's picture

panic and euphoria are powerful drugs and should be kept away from pets and house plants.

Wed, 05/28/2014 - 13:50 | 4802472 docmac324
docmac324's picture

They can only buy back so much, then what?

Wed, 05/28/2014 - 13:52 | 4802482 NotApplicable
NotApplicable's picture


Wed, 05/28/2014 - 14:10 | 4802480 khakuda
khakuda's picture

And the credit markets are as frothy as they've ever been.

But I'm not sure it matters for now because the central banks remind us every day that they aren't going to shut down the party no matter what.  At least in the past, they attempted to rein in animal spirits.  This time, they are going to go over the top and break everything to see how that works.  That is the genius is the 'honey, how about we don't pull it out this time and see what happens" plan.

Having no long term memory, the equity markets could go parabolic and easily double from here because the Fed has decoupled prices from reality on purpose with ZIRP and QE.  A zero percent interest rate expands PEs, increases earnings via debt refi and increases EPS via share buybacks.

Eventually, it won't end well, but it could continue for many more quarters or years to come and bring asset prices to stupid levels.  It wouldn't be the first time.

Wed, 05/28/2014 - 13:54 | 4802487 alien-IQ
alien-IQ's picture

and new all time highs just keep coming...fucking astounding.

Wed, 05/28/2014 - 13:57 | 4802489 Dr. Engali
Dr. Engali's picture

Gas jumped up to $3.99 from $3.60 today. We'll see how long the euphoria lasts. I just came back from getting my hair cut and the main topic in the salon/parlor (whateverthefuckyouwanttocallit) was "how crazy expensive things are getting lately". 

Wed, 05/28/2014 - 15:02 | 4802684 disabledvet
disabledvet's picture

Bernie Madoff only came as a surprise to the Government. They still don't understand why they have to fork over 600 billion for a defense budget.

ergo "they'll be surprised by the next Bernie Madoff too."

Wed, 05/28/2014 - 15:06 | 4802699 Al Huxley
Al Huxley's picture

Did you set people straight and explain that they're wrong - that there are plenty of government figures that have established the inflation rate to be very low?

Wed, 05/28/2014 - 14:01 | 4802505 bam
bam's picture

not sure why anyone would be buying stawks when you can just short VIX futures 

Wed, 05/28/2014 - 14:02 | 4802508 buzzsaw99
buzzsaw99's picture

there is no market there is only old yeller

Wed, 05/28/2014 - 14:10 | 4802535 moneybots
moneybots's picture

Despite the constant clamor of money-on-the-sidelines (which Cliff Asness has summarily dismissed as being idiotic)


What is going to happen when the money sidelined in the stock market, comes off being  sidelined in the stock market?

Wed, 05/28/2014 - 16:52 | 4802999 cocoablini
cocoablini's picture

Everything has become a manipulated,collusional DeBeers-type Diamond racket. That's the global financial model. Take near worthless assets, strangle the supply and ramp the asset value.

Let's take Apple for instance. Tim Cook, his buds and Carl Icahn all collude to manipulate the asset price upwards(to counteract poor iPad sales and Google incursions into sales) by releaseing a stock split and a stock buyback all at the same time. WHY? Because the aforementioned insiders hold a lot of stock and pay themselves in stock and will not let the stock price go anywhere because that affects their assets.

Now take that attitude and apply it to the entire market. And take those illegal manipulations and run it by the Feds. They don't care because they are told that asset value and protecting the overlevered IS MORE IMPORTANT than true price discovery. Protect the bondholders, the overlevered, the public pensions with malinvestment using US bonds to juice the asset value.

The likelihood that the markets will crash in such low volume/easily ramped HFT trading is very low. 

Wed, 05/28/2014 - 18:44 | 4803370 brucekeller
brucekeller's picture

It's missing the latest euphoric part... but only looks 1/2 way to crash type euphoria to me.

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