Walls-of-worry; Short-squeezes; money-on-the-sidelines; Everyone's Bearish, right? Well, instead of just listening to the drone of the mainstream media and talking heads, who appear once any rally appears in the hope of garnering some more AUM and taking commissions, we thought it worth a few minutes to look at actual data, positions, and sentiment across equity, debt, and FX asset classes. Sure enough - here are ten charts that show investors are anything but bearish and that the ammunition for the next leg from here can only come from central-banks (and we are concerned that disappointment is due).
The CBOE's Put-Call Ratio is now in notably overbought (contrarian-wise over-bullish or complacent)
AAII Bears low and Bulls/Bears rising rapidly (about +1 sigma bullish)
Commitment of Traders in S&P 500 e-mini futures is 'normal' and does not have the ammo to provide another short-squeeze (as it did in September of last year)
IG Credit Net Positioning in Europe and the US is near record long
High-Yield credit has not participated dramatically in this upside rally
Corporate Bond Advance-Decline Line was very recently at extreme highs (rolling over now)
Equity Implied Vol is below Realized Vol (somewhat extreme levels of complacency that things stay well-behaved)
Credit Implied Vol is below Realized Vol
Credit vol skews very complacent (just like stocks)
EURUSD and its EUR-USD swap-spread 'fair-value' have converged - removing much of the squeeze factor in that differential (between rate carry and FX carry)
So all-in-all, it seems there are fewer suckers on the sidelines to be dragged long into this hope-ridden extravaganza - no matter what you read or hear...
Charts: Bloomberg, BofAML, Morgan Stanley