Citigroup's two gauges of investor sentiment - the cyclical expectations model (CEM) and panic-euphoria model (PEM) - both sent out positive short- and intermediate-term signals, respectively, on Monday. The CEM, which consists of six readings from the fixed income and commodity markets as well as the real economy, has now turned positive for two consecutive weeks after a string of cautionary warnings for the prior several weeks. "This gauge is generally a good lead indicator for market trends with a one-to three-week time horizon, and the stock market's recent ability to find its footing is an encouraging sign," writes strategist Tobias Levkovich. Meanwhile, the PEM has tumbled into "panic" territory, which indicates a 98 per cent probability of equity market gains in the next 12 months and a 93 per cent chance of gains within six months, when reviewing roughly 20 years of history, he notes. On average, though, 12-month gains are 20 per cent, looking at "panic" level readings in the past, he adds.