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With The S&P 2% From All Time Highs, Wall Street Bearishness Is More Extreme Than March 2009
One would think contrived confidence would lead to more confidence, and manipulated market record highs would lead in abundant euphoria and market bullishness, a traditional reflexive feedback loop used and abused by central banks the world over over the past century. One would be wrong.
With the S&P500 about 2-3% from all time record highs, a range it has been trading in for the past 7 months...
... BofA says that its "Sell Side" indicator is suggesting Wall Street bearishness is greater than during the extreme selloff in March 2009 when the S&P hit the infamous 666.
In July, the Sell Side Indicator — our measure of Wall Street’s bullishness on stocks — was unchanged at 52.0 for the fourth consecutive month. The indicator remains in “Buy” territory, as Wall Street’s bearishness is still more extreme than at the market lows of March 2009. Given the contrarian nature of this indicator, we remain encouraged by Wall Street’s ongoing lack of optimism and the fact that strategists are still recommending that investors significantly underweight equities, at 52% vs. a traditional long-term average benchmark weighting of 60-65%.
What does this contrived sentiment indicator suggest? "Historically, when our indicator has been this low or lower, total returns over the subsequent 12 months have been positive 97% of the time, with median 12-month returns of +25%. However, past performance is not an indication of future results."
As to how it is determined...
The Sell Side Indicator is based on the average recommended equity allocation of Wall Street strategists as of the last business day of each month. We have found that Wall Street’s consensus equity allocation has historically been a reliable contrary indicator. In other words, it has historically been a bullish signal when Wall Street was extremely bearish, and vice versa. See our December report for more details on the Sell Side Indicator.
Actually, what this "indicator" suggests is that the only reason the market keeps grinding higher is due to central banks: 7 years into the non-recovery, and with everyone selling into the rally except central banks directly or indirectly purchasing risk, and corporations buying back stock, it is hardly a surprise that Wall Street wants "out." that said we can't blame BofA's Savita Subramanian who is desperate to milk the last ounces of this rigged rally: even BofA has to make its soft dollar quotas somehow.
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Optimism is a mental disorder.
Only if you are middle class or lower.
Especially if you are counting on Washington.
Everyone has some type of mental disorder, it's like with marriage, there is always something that is NOT going to work out, and then it's the couple job to find out what it is and then how best to deal with it. Tying the knot is fun at first, but total carnage ensues shortly afterwords to mess the whole cycle up and can be easily seen in the form of beatings and finally, divorces.
I'm not happy. Why did someone not tell me the market is about to go up 25% before now?
What does this contrived sentiment indicator suggest? "Historically, when our indicator has been this low or lower, total returns over the subsequent 12 months have been positive 97% of the time, with median 12-month returns of +25%...
wow zh posts what looks like just another bearish piece at first glance but dig down a little and BOOM! BULLISH! repent. the end is nigh.
Seriously...what the hell is up with this article. First half really pushing bullish, then BAM, expect market to increase 25% over the next 12 months. Fuckin eh...
Never trust the sell side.
It's goldbugs fault
need to crush them again
Is the S&P 2% from all time highs or is it 2% short of a precipice?
Personally I think that once the S&P hits 2150 it will crack badly.
Those making a deal with the devil never believe they will suffer the worst outcome.
Optimists
Every critter on the face of the planet wants a piece of my plant at some point during it's growth, execpt the devil, he just needs horns and a red body to get through the day.
If everyone is bearish, who is buying to keep S&P at all time highs????
As long as there are people who see any consensus at all that a buying opportunity exists, they will buy. Also we have huge institutions who's job is to BUY. They will be out of a job if they sell and put the money into ZIRP. The fictitious promise of gain always outweighs the surety of minimal or no gains.
SNB balance sheet fail - central bank canary in coal mine.
The elephant in the living room is yellen - figuratively and literally.
BUY MOAR STAWKS YELLEN YOU WRETCHED SATANIC CUNT!!!!
If there ever is a payment for previous manipulations, the market is 50% overvalued.
Does Graham have a rule that says just because a stock has been manipulated for 5 + years, it's present value becomes the real value?
Let us know when the S&P is 60% from all time highs so we can buy fairly valued stocks rather than central bank priced assets.
What is going to stop Wall Street from just printing more trillions...really? I mean they now have a law unto themselves...unlike any period in history. Zero Rates! FED printing Trillions for themselves. People like Blankfein and Corzine...immune to the rule of law. Never been worse. The Nixon period is looking quaint!