Does Anyone Detect A Hint Of Complacency?

What a fascinating market and via FT Alphaville comes another good indicator of how "extreme" investor sentiment has become. Joshua Brown in Ladies and Gentlemen, We Are Trading On The Moon (!) has so far the best & funniest transcription of the latest market behavior....

As i have written in the past few days in Don´t Call It A Bubble.... & "Anti Spin" i´m a very sceptical ( more bearish than ever ) that this kind of market level is sustainable.... Especially in the face of a "spiking" Sovereign Misery Index .....To be honest i´m thinking this since October.... Make sure you watch the following clip.... Nice to see that Saluzzi still isn´t drinking the kool aid....

Bin jeden Tag aufs neue fasziniert wie der Markt auf die Nachrichtenlage reagiert. Meiner Meinung nach Joshua Brown in Ladies and Gentlemen, We Are Trading On The Moon (!) die bisher beste und lustigste Analyse zu Papier gebracht.

Ich bin wie in Don´t Call It A Bubble.... & "Anti Spin" geschrieben "skeptisch" ( höflich umschrieben ) was die Nachhaltigkeit der Kursanstiege angeht. Und all das im Angesicht eines täglich steigenden Sovereign Misery Index .....Meiner Meinung nach ist das Chance/Risikoprofil so unvorteilhaft wie selten....Die Skepsis steigt momentan tagtäglich und erreicht geradezu schwindelerregende Höhen.... ;-) Der nachfolgende Clip von Saluzzi liefert eine weitere gute Bestandsaufnahme in Sachen aktuelle Marktstimmung.....

Chilled markets FT Alphaville

Markets move on the interaction of news with flows of greed and fear among investors. When fear is lowest, the danger of a fall is greatest.

Especially when other sentiment indicators are considered:

Another great contrarian indicator is the survey of sentiment by the American Association of Individual Investors. Last week, this showed the lowest proportion of self-described “bears” since February 2007 – when volatility first started to spike as investors at last began to grasp the severity of the subprime mortgage crisis in the US.

Bearishness in this survey hit an all-time high in March last year when the current rally first started, showing how much money can be made by betting against extremes of sentiment.

But it’s not just the retail punter who’s bullish.

The Pros are too.

From Bloomberg:

Investors forecast gains in each of the nine countries represented in the Bloomberg Professional Confidence Survey for the first time since the data began in 2007.

The sentiment measure for the Standard & Poor’s 500 Index climbed 35 percent to 54.37. That’s only the second time the reading exceeded 50, signaling participants anticipate a rally in the next six months.

The responses from 4,101 Bloomberg users were gathered Jan. 4-8 as the MSCI World Index added 2.6 percent.

The Bloomberg sentiment indexes for the U.S., Japan and Spain rose above 50 and reached all-time highs.

The U.K. gauge topped 50 for the first time since October, while Switzerland climbed to a record.

Spain exceeded 50 for the first time, adding 17 percent to 51.41.

Confidence in Switzerland climbed 3.6 percent to 60.89, and the U.K. index surged 22 percent to 55.61. The measures for Italy, France and Germany increased 14 percent, 3.7 percent and 2.4 percent to 62.61, 57.77 and 53.33, respectively.

Does anyone detect a hint of complacency?

FUND MANAGER BULLISHNESS COULD BE WARNING SIGN PragCap

The latest survey showed the highest surge in Merrill’s Risk & Liquidity(46%) indicator since May of 2006. In the past, this indicator has served as a fairly good contrarian indicator.

This survey is showing some contrariansell signals. Just 45% of fund managers are protecting themselves against a downturn versus 52% in December. The survey also shows a strong appetite for risk and high beta names

Faber on complacency & investor sentiment......



EXCELLENT!