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2026-07-18 01:40:14
A team of Bank of America strategists, led by Michael Hartnett, pointed out that bullish sentiment among participants in asset allocation is currently at an extreme level. This is often a warning signal from the market, suggesting that investors should "reduce equity positions, take profits, or adjust portfolio structure for sector rotation" rather than continue to increase their allocation to risky assets. In a research report released last Friday, Hartnett mentioned that Bank of America's internal "Bull & Bear Indicator," used to measure market sentiment, has triggered a reverse "sell signal." The core reasons for this signal include "a significant decline in institutional cash holdings, strong inflows into the stock market," and the continued broadening of global stock index gains. The indicator has now risen to 9.6, further entering extremely bullish territory. About two months ago, the indicator reading was 8.0, a value that typically indicates the market is overheated due to concentrated bullish positions. According to Bank of America's standards, a buy signal only occurs when the indicator falls below the 2.0 threshold.
