Mensajepor elcata » Mar Sep 21, 2010 6:13 pm
Sera momento de una toma de corto los hedge fund se empiezan a shortear mas
By Lu Wang
Sept. 21 (Bloomberg) -- Individuals are more bullish on
U.S. stocks than any time this year even as hedge funds boost
bets that equities will drop. That signals the Standard & Poor’s
500 Index may hold near its current level, according to Bank of
America Corp.’s Mary Ann Bartels.
The latest weekly survey from the American Association of
Individual Investors showed bulls outpaced bears by 2.10, the
highest ratio since Dec. 31. While the stock rally in September
has turned more individuals optimistic, hedge funds that trade
on rising and falling stock prices have reduced wagers that
shares will rise to 18 percent above their overall holdings,
compared with an average of 35 percent to 40 percent, according
to Bank of America estimates.
The conflicting views between smaller investors and hedge
funds highlight the divergence of the market where earnings are
forecast to rise at the fastest pace since 1988, even amid signs
that economic growth is slowing.
“The equity market this year has frustrated both the bulls
and the bears, and this is likely to continue into year-end,”
Bartels, ranked second among analysts who study price charts in
Institutional Investor magazine’s most recent survey, wrote in a
note to clients yesterday.
The S&P 500 has climbed as much as 9.2 percent since the
end of last year and fallen as much as 8.3 percent. It advanced
1.6 percent to 1,143.67 yesterday and is up 2.6 percent in 2010.
Individuals Return
Individuals are becoming more optimistic after shunning
equities in favor of bonds following the 2008 financial crisis.
Almost $57 billion was withdrawn from U.S. stock mutual funds
from May through August, the most during any four-month period
since 2008, according to data compiled by the Investment Company
Institute. At the same time, about $100 billion was stashed in
bond funds.
Gains in the S&P 500 occurring at the start of the day
signal smaller investors are buying, as that’s the time when
they enter the most transactions, Bespoke Investment Group LLC
said in a report Sept. 17.
The AAII’s bull/bear ratio has exceeded 2 on seven
occasions since the beginning of 2006, all of which were
followed by losses for the S&P 500 ranging from 6.7 percent to
20 percent, according to Bank of America. On average, the
decline was 12 percent.
‘Too Bullish’
Readings above 2 “have suggested that individual investors
have become too bullish,” Bartels said. Last week’s survey
result is “a potential contrarian bearish sign.”
In August, Bartels forecast that the S&P 500 may be due for
another plunge after the benchmark for U.S. equities slumped on
rising volumes. The index, which suffered the bull market’s
biggest decline from April to July, dropped 4.7 percent last
month before rebounding 9 percent in September.
Bartels said the biggest risk to her call for a “deeper
correction” is the position by hedge funds and traders.
Leveraged short exchange-traded funds have issued 2.8 percent of
assets over the last week and 5.7 percent over the last two
weeks, the note said, citing data from TrimTabs Investment
Research.
“This indicates a bias to the short-side which is a
contrarian bullish sign,” Bartels wrote. “Fast money or hedge
funds are positioned defensively, and if the market breaks key
resistance levels, short covering as well as outright buying is
likely to occur.”
The S&P 500 needs to exceed 1,150 to invalidate a potential
head and shoulders top that would indicate a reversal of a
bullish trend, Bartels said. A break above that level would send
the benchmark to revisit its 2010 intraday high of 1,119.80
reached in April, she said.
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