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The bear case for stocks may make sense, but how do you square it with BAML's survey showing...

The bear case for stocks may make sense, but how do you square it with BAML's survey showing overwhelming bearishness (the highest since 1985) amongst professional managers? Such extremes in negative sentiment have been great buying opportunities in the past. (h/t tradefast)
Comments (5)
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    People know there is no fundamental reason to be long right now but as long as HFT rules the market fundamentals and technicals go out the window.
    4 Sep 2012, 11:27 AM Reply Like
  • Ray - Kitchener
    , contributor
    Comments (74) | Send Message
     
    Why do cheerleaders always point to the past? We are in uncharted waters. Never before have we had such central bank intervention. manipulation can go on for some time. Nevertheless, economics are getting worse everywhere. The bubbles keep inflating thanks to Ben and Mario. Time will tell.
    4 Sep 2012, 11:31 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    The chart is dumb without the S&P500 overlay.

     

    What it appears to show is that markets peak right at relative bullish peaks and then sell-off. Take a look at 2000 and Jan 2007.

     

    You could just as easily conclude that the recent bullish top for this index once again marked the top on the market.

     

    Although in theory this really could be a buy signal, then again so is any other piece of data - it all depends upon your mindset :)
    4 Sep 2012, 11:32 AM Reply Like
  • gizmobently
    , contributor
    Comments (4) | Send Message
     
    How can they be so bearish with such a low VIX index? Seems conflicting to me. Investor complacency and fear, which is based on this index of at the money options is at all time lows and yet someone says professional investors are at all time bears! Seems conflicting to me, but look at high yield bonds yielding all time lows of around 6 1/2%. What does that tell you about the general mood of this market? Its telling me that either professional investors or whoever are not paying one bit of attention to a bearish scenario. If anything, it is telling me that this market is very bullish and risk is not a premium. That is not what you find in a market that is dominated by bearish investors.
    4 Sep 2012, 06:44 PM Reply Like
  • Facts&Faith
    , contributor
    Comments (88) | Send Message
     
    Occasionally... sentiment matches reality. Like when sentiment is opposite the chart because it is growing wise to a rigged market.
    4 Sep 2012, 09:48 PM Reply Like
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