Citibank’s chief US equity strategist Tobias Levkovich thinks that bearishness among investors bodes well for stocks.
In a recent note to clients, Levkovich wrote that the all-pervading bearishness, the flows, and the positioning that has resulted from it “argues for a near 97% chance of a higher S&P 500 by mid-2017”.
“Thus, we remain comfortable with a 2,150 year-end 2016 target and a 2,250 mid-year 2017 objective,” he added.
However, according to the AAII sentiment survey, bullish sentiment jumped 12.4 percentage points to 30.2 percent last week, a six-week high. Bullish sentiment, though, remained below its historical average of 38.5 percent for the 30th consecutive week.