Long And Relieved: Citi Strikes Me Again ...

I read the summary of Equity Strategy by Citi' s Tobias Levkovich today (North America Investment Daily edition), and it resembles the Merrill's Global Fund Manager Survey, I noted yesterday, in some way...
However, I would like to point out two paragraphs of that summary (my emphasis):

Fund performance shows a bullish bias emerging. A study of Bloomberg data shows that the vast majority of funds have outperformed the S&P 500 in the past month through June 17), the past three months and year-to-date, arguing that 2008’s portfolio manager performance anxiety has diminished markedly. Actively-managed US equity funds have generated returns averaging about 7% through May, versus roughly 3% for the S&P 500 over the same time frame and the differential is at its widest since 1983, according to Morningstar data.

Sentiment surveys display rebounding enthusiasm but not ebullience. Most sentiment work illustrates that the fear that gripped the investment community three months ago has dissipated in almost dramatic fashion. However, it is also fair to say that the mood has not turned truly bullish either as economic worries still abound. Nonetheless, we believe that the market catalyst of depressed investor
sentiment lifting is missing for further gains.

A 45% swing in the relative stock/Treasuries trade demonstrates a 1933-like bounce. Assuming that stock and bond prices end the year at current levels, the relative performance swing would be nearly as sharp as the one experienced in 1933 following the 1932 swoon of stock prices. While we foresee more modest gains from current levels, the bulk of the move may already have occurred and investors need to lower their expectations.

Anecdotal evidence supports a more buoyant Wall Street. In several instances of late, the very same investors who perceived our bullishness several months ago as bordering on lunacy now consider our market outlook (S&P 500 at 1,000 by year-end) to be too conservative. To some degree, we have been surprised by the speed of this turn of events but the equity market’s powerful move since early March most likely explains this shift.

Sidelined cash may not chase returns but markets can gr1ind higher. While it is popular to argue that all of the cash on the sidelines may need to make its way into equities, we suspect that two equity market collapses in the past nine years may keep investors a bit more on the side of caution, especially as their equity exposure is not as severely underweight as was the case in the early 1980s. Nonetheless, further improvement on the economy should support additional equity market appreciation this year, especially for names in the Diversified Financials, Insurance, Capital Goods, Tech and Energy areas with some select opportunities in the Materials area.

" ... display rebounding enthusiasm but not ebullience ... In several instances of late, the very same investors who perceived our bullishness several months ago as bordering on lunacy now consider our market outlook (S&P 500 at 1,000 by year-end) to be too conservative. To some degree, we have been surprised by the speed of this turn of events but the equity market’s powerful move since early March most likely explains this shift."

So, You decide! "Maximum pain and frustration rule" now requires a move higher, and not only that ...