On 7 June, Bank of America strategist Michael Hartnett warned that global equities were about to trigger a technical "sell" signal after hitting record highs this week. He said the market is currently overheating after surging 20% in just two months. He cites money flows and market breadth data as evidence that investors are pouring into risky assets and are overpositioned. Traders often use this as a bearish signal, as it could theoretically indicate that the market's buying power may soon run out and the price can easily pull back. Data cited by Hartnett shows that inflows into equities and high-yield bonds have accounted for 0.9% of total assets over the past four weeks. He said that if that figure rises above 1%, it will be a sign that investors are selling. At the same time, the market is approaching the "overbought zone". About 84% of national indices are above their 50-day and 200-day moving averages. He stated that when the indicator reached 88%, his sell trigger point was reached. ( gold ten )
View Original
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Bank of America: Global stock markets are close to triggering sell signals
On 7 June, Bank of America strategist Michael Hartnett warned that global equities were about to trigger a technical "sell" signal after hitting record highs this week. He said the market is currently overheating after surging 20% in just two months. He cites money flows and market breadth data as evidence that investors are pouring into risky assets and are overpositioned. Traders often use this as a bearish signal, as it could theoretically indicate that the market's buying power may soon run out and the price can easily pull back. Data cited by Hartnett shows that inflows into equities and high-yield bonds have accounted for 0.9% of total assets over the past four weeks. He said that if that figure rises above 1%, it will be a sign that investors are selling. At the same time, the market is approaching the "overbought zone". About 84% of national indices are above their 50-day and 200-day moving averages. He stated that when the indicator reached 88%, his sell trigger point was reached. ( gold ten )