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[Londres, 7 de Reuters]- The global stock market has hit record highs multiple times earlier this month, favoring the commercialization of the new coronavirus vaccine. However, in some cases, multiple “sell signals” come on and the move to update the higher price is likely to stop soon.
According to EPFR data, the number of inflows into stock funds in the past four weeks reached a record $ 115 billion, and the US S&P 500 stock index rose 13% in one month to a new high. The European STOX 600 has increased by 15% during this period.
“Market confidence continues to float and there is no question that it has gone too far,” said Jimmy Conway, director of EMEA (Europe, Middle East and Africa) equity trading strategy at Citibank.
Banks have indicated that investor positions are “excessively” bullish. However, after minor adjustments, the economy is expected to recover in 2021, supported by the spread of vaccines, and profitability on stocks is expected to reach double digits.
Goldman Sachs told clients that Corona’s new infection was getting worse in the United States, saying “there was an increased risk of minor adjustments in stocks in the short term.”
However, once the adjustments are complete, investors expect to continue moving money from cash to stocks.
Here are five charts showing investors’ stock positions.
(1) Increased bullish psychology
According to the latest survey by the American Association of Individual Investors (AAII), the bullish sentiment of individual American investors has reached its highest level in about three years. The rise of bullish psychology is a typical sign to the contrary.
(2) Calls increase rapidly, sales decrease
The put / call ratio on the Chicago Stock Exchange (CBOE) is at its lowest level since just before the collapse of the “dot-com bubble” 20 years ago.
(3) RSI is “overbought”
The S&P 500 and STOXX 600 are in the overbought zone by technical indicators. The “Relative Strength Index (RSI)”, which indicates bullish and bearish momentum with numbers from 0 to 100, is around 70, and it’s easy to sell take profit.
The Nikkei average RSI entered overbought territory in November, after which share prices fell slightly.
(4) Bull Bear Index
The Bank of America (BofA) announced last week that the “Bullbear Index”, which is a burning indicator of market sentiment, rose from 4.7 to 5.8, approaching an “extremely bullish” level. did. If the index is 0, it is extremely bearish and signals a “buy”, and if it is 10, it is extremely bullish and signals a “sell”.
(5) don’t worry
The S&P 500 species collected about 65% from the mid-March bottom. This is comparable to the rate of increase in the eight months after bottoming out in the 2007-08 global financial crisis. The bulls would point out that the uptrend continued for 20 years, which means that the current rise in share prices means there are no worries.
