10-23-2018, 07:14 AM
And pessimism can turn into optimism at lightening speed..
Wall Street has performed a thorough autopsy on the latest sell-off, which saw US stocks lose as much as 7% in a matter of days. And their answer is simple: No, this isn't the death blow. In fact, investors should be buying more stocks. In order to reach this conclusion, JPMorgan analyzed client positioning data it says encapsulates overall hedge-fund sentiment. The firm found the following to be true: The October sell-off was focused on US equities. Clients are the most underweight on US stocks versus their non-US counterparts since January 2017. Clients are showing a preference for out-of-favor value stocks, as opposed to their high-growth peers. That all sounds bearish, right? Here's the catch: JPMorgan has found that these client positions have historically been a contrarian indicator.
Stock market strategy: Wall Street says traders should buy the dip - Business Insider