Click to enlarge

Source Merrill Lynch



I’ve shown this chart several times over the past year, but its worth repeating: The Street remains very bearish by historical standards.

Note this is not at all a short term indicator; and does operate with a bit of a lag.


Strategists Most Bearish on Equities since 1985 (August 1st, 2012)

Equity sentiment ticks up in March
Savita Subramanian, Dan Suzuki, Alex Makedon, Jill Carey
Merrill Lynch, April 1, 2013

Category: Contrary Indicators, Sentiment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Sell Side Consensus Indicator Still Extremely Bearish”

  1. cuprous says:

    I realize volumes could be written in response to this simple question but how do you reconcile a record stock rally with “the street remains very Bearish”? Are the bears holding their nose while clicking Buy? Or is the real answer that all these historical charts and indicators have little relevance so long as dear old Uncle Ben is dumping $3 billion in new currency

  2. [...] Sell-side strategists are still bearish.  (Big Picture) [...]

  3. Disinfectant says:

    This chart is NOT VALID! See

    P.S. This is the third time in a row that BR has posted this chart and I’ve pointed out that it is bad data in the comments. Obviously, BR does not read my comments, but maybe third time is the charm.


    BR: I’ll check with the authors about what goes into this indicator

  4. mmiranda says:

    I just cant remember one single sell side strategist whos been bearish on US stocks in a while. Except for Adam Parker, with MS, who has recently been sounding more neutral/upbeat. How this sell side indicator remain that bearish is a mistery to me….


    BR: Steve Roach (on US, Bullish on China) Merrill/ Gluskin Sheff’s David Rosenberg, Soc Gen’s Albert Edwards, Dylan Grice, Morgan Stanley’s Adam Parker

  5. mad97123 says:

    Yet here is Merrill Lynch pointing out that margin debt is nearing record highs again, so Wall Street can’t be that bearish.

  6. [...] second chart comes to us from our colleague Barry Ritholtz’s Big Picture. Barry notes the Street remains very bearish by historical standards, which is a contrarian [...]

  7. “The Sell Side Indicator is based on the average recommended equity allocation of
    Wall Street strategists as of the last business day of each month.”

    Let me find out how many strategists are involved

  8. Currently there are 8 strategists

    The method for getting the data varies, some we call each month for their most recently published allocations, the rest of whom regularly publish their allocations to Bloomberg terminal

    • Disinfectant says:

      BR, the number of strategists is not the issue. The problem is that the allocations used to be Stocks + Bonds + Cash = 100%. Now it’s Stocks + Bonds + Cash + Commodities + Real Estate + Other = 100%, but none of that extra stuff shows up in the chart. Also, Bonds today is not the same as Bonds a decade ago. It was traditionally just investment-grade bonds, but someone today may say they have 40% in bonds, but 30% is junk. Thus, the actual risk profiles are materially different than implied by the chart.