TOO BULLISH?

Finweek English Edition - - INVESTMENT -

Ac­cord­ing to as­set man­age­ment firm Stan­lib, US mar­ket an­a­lyst Elaine Garzarelli be­lieves that mar­ket par­tic­i­pants may be get­ting too up­beat about the prospects for eq­uity mar­kets. Ac­cord­ing to her model, the in­di­ca­tor sits at 80% bullish but cau­tions the num­ber of bullish in­vest­ment ad­vi­sors has in­creased for four con­sec­u­tive weeks to a level of 55.2%, which she con­sid­ers high. Garzarelli warns that as a con­trar­ian in­di­ca­tor, it is neg­a­tive to have a high num­ber of bullish ad­vi­sors be­cause more cash is al­ready in­vested, leav­ing less cash to fuel share prices. She be­lieves any mar­ket cor­rec­tion should be limited to be­tween 4-7%.

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