Nomura - inte bearish, men de varnar för att det ser ut som i mars

Good morning – based on our composite sentiment indicator – we believe that the time has come for a brief pause in the rally. Firstly because sentiment has become too stretched, and secondly, there is a lack of catalysts in the near future. Our composite sentiment indicator is now at the highest level since early 2011, indicating sentiment is quite bullish. We should have paid more attention to this indicator earlier in the year. It last peaked on 16th March, calling the top of the Eurostoxx well. Likewise, the two recent troughs in the indicator in September 2011 and May 2012 also did well at calling rallies.


We are in no way getting bearish – this is a short-term call before the ‘news flow’ starts again in September.