Individual investors are now (almost) uniformly bullish on equities.
“Buy the dip” has been a killer strategy for months and months now, and we’re once again in that mentality where nobody sees any risks, and nobody wants to settle for the skimpy returns offered by Treasuries.
But watch out.
According to Bank of America/Merrill Lynch’s latest look at hedge fund positioning, the smart money is starting to turn on this market. For the first time since October, Long/Short funds have reduced their net long exposure (currently at 25%), As MarketFolly notes, the last time they retrenched, there was a subsequent market selloff.
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