Citi’s panic/euphoria model is used as a longer term indicator, indicating a 12 month direction.
Latest update is showing its bordering on the euphoric end of the scale, which is a bearish indicator – suggesting negative returns over the next 12 months.
Citi say the rally has been due to:
- a ‘TINA (there is no alternative) trade’ effect
- new entrants to the stock market using the drop to buy into, the buyers not having “much background in the equity space”