Friday, November 20, 2009

Contrarian Indicators: Equity and Oil Trade Getting Crowded

New report out by David Rosenberg at Gluskin Sheff, where he maps out the fall 2009 Big Money Manager survey in conjunction with Barron's. The result - most fund managers are hugely optimistic on a continued run in equities and oil, somewhat ambivalent on the direction of gold, and hugely bearish on treasuries. These are some very interesting contrarian indicators. In order for an equity market correction to ensue, all it would take is a short rally in the dollar, to smoke the bulls out of their positions and send them scurrying into the safety of Treasuries. We saw some of this today when the equity markets fell and 3-month treasury yields went negative for the first time since September 2008, when the financial crisis first hit.


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