Source: http://www.businessinsider.com/citi-panic-euphoria-model-says-buy-2011-10
The S&P 500 is down 17% since its April 29 high. Yesterday, the markets briefly dipped into bear market territory. Fears of a global recession have kept stock market volatility elevated.
But, Citigroup strategist Tobias Levkovich argues that the all out panic actually presents a great buying opportunity for investors. He notes:
The proprietary Panic/Euphoria Model has been in panic territory since August 19th and the level generates a near 90% chance of higher equity prices in six months and a 97% probability of teen-like gains in the next 12 months (see Figure 3). Back in 2000 and 2008, there were indications of euphoria; not dour sentiment. Furthermore, the significant disavowal of equities as an investment asset class by the general public is obvious given the large US stock mutual fund withdrawals. Such a trend sends a fairly clear contrarian message of opportunity.
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See Also:
- STOCKS STAGE ANOTHER MASSIVE GLOBAL RALLY: Here's What You Need To Know
- European Markets Surge On Bank Recapitalization Rumors
- UBS: How Stocks Respond To Fear
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