How do you know when the euphoria has reached a fever pitch?
Well, one indication might be when you poll active money managers, ask them to provide a number that represents their overall equity exposure, and the most bearish responses you get are still bullish.
Every week, the NAAIM asks member firms to choose a number that indicates how they’re positioned. The range of possible responses is as follows:
200% Leveraged Short
100% Fully Short
0% (100% Cash or Hedged to Market Neutral)
100% Fully Invested
200% Leveraged Long
Ok, well guess what? If you download the CSV file available at their website and plot the “most bearish response” to each week’s survey going back to inception, this is what comes out:
Again, that’s a plot of the most “bearish” responses. In other words, even the bears are now long.
Is that capitulation? Hell, who knows. I guess it’s always possible that we’ll get leveraged long “bears” before things finally fall apart.
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