The National Association of Active Investment Managers released its weekly sentiment survey which acts as a contrary indicator. Every week investment managers are asked to describe their total equity exposure. This week the average equity exposure of respondents was 57.66%, down from last weeks reading of 72%. Generally a number north of 70% is considered extreme and usually marks a top in the market. So despite the market's rally, investment managers have scaled down their total equity exposure. This may seem like a bullish sign but it should be noted the NAAIM survey is very volatile and does not perfectly correlate with the market. Nonetheless it is always important to keep an eye on what the pros are doing and how they are positioning their portfolios. As a trading indicator, I would not be relying on the NAAIM survey right now as it is giving mixed signals.
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Black Swan Insights