Original post is here Summary: Global equities are more than 25% higher than in February 2016. A tailwind for this rally has been the bearish positioning of investors, with fund managers persistently shunning equities in exchange for holding cash. That's no longer the case. Fund managers became bullish again in December, and remain so now. Optimism towards the economy has surged to a 2-year high. Cash remains in favor (a positive) but global equity allocations are back above neutral for the first time since late 2015. Another push higher and excessive bullish sentiment will become a headwind. The US is the most overweighted equity market on a relative basis. Emerging markets are the most underweighted. Findings in the bond market are of greatest interest. Fund managers' allocations to global bonds are now at prior capitulation lows. Moreover, inflation and growth expectations have jumped to the highest level since early 2011, after which US 10-year yields fell in half over the next several months. The dollar is considered the most overvalued in the past 10 years. Under similar conditions, the dollar has fallen in value in the month(s) ahead. Cash: Fund managers' cash levels dropped from 5.8% in October 2016 to 4.9% in February. Recall that 5.8% was the highest cash level since November 2001. Cash remained above 5% for almost all of 2016, the longest stretch of elevated cash in the survey's history. Some of the tailwind behind the rally is now gone but cash is still supportive of further gains in equities. A significant further drop in cash in the month ahead, however, would be bearish. Enlarge any image by clicking on it. Global equities: Fund managers were just +5% overweight equities at their low in February 2016; since 2009, allocations had only been lower in mid-2011 and mid-2012, periods which were notable bottoms for equity prices during this bull market. Allocations in February have jumped to +39% overweight, a 13-month high. This is now slightly above neutral (0.4 standard deviation above the long term mean). Over +50% overweight has historically been bearish (dashed line). the continuation of the review here