According to the latest Bank of America Merrill Lynch (BofAML) fund manager survey, which was conducted between July 2 and July 9, cash levels rose to 5.5% due to concerns over Greece, China and a possible interest rate hike by the Federal Reserve. It was the highest level since December 2008.

"When average cash balance rises above 4.5% a contrarian buy signal is generated for equities. When the cash balance falls below 3.5% a contrarian sell signal is generated," BofAML analysts said.