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The latest Merrill Lynch Fund Managers Survey showed the highest reading of bullishness ever.  They report that fund managers have a net 67% overweight position in equities.  This is the highest level they have ever recorded.  Gary Baker of Merrill writes:

“The February FMS is one of the most bullish in years. Institutions have record equity and commodity overweights, very low cash levels and the strongest risk appetite since Jan‘06. Surging inflation expectations show we are no longer in a Goldilocks environment and a meaningful tactical correction in risk assets could be caused by a jump in interest rates or weaker US growth.”
Allocations are currently excessively bullish and consistent with past corrections:
“Global investors’ average cash balance fallen by 20bps to 3.5%. On our backtesting work a level of 3.5% or below has in the past signalled an equity market correction on a four-week horizon.”
Merrill says investors are “all in” on equities with commodities a close second:
“Investors have moved to all-in on equities, at +67% O/W. This is the highest level in survey history. This puts the asset class into potentially overowned territory(more than +1SD above average), and makes it vulnerable to any macro disappointment, but could also be part of a structural re-alignment.   Commodities remain the second most popular asset class after equities, and have also reached a new to record allocation reading of net 28% O/W, upfrom a net 16% last month.”
Source: Merrill Lynch via ZeroHedge

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