Bank of America: Global Stock Markets Nearing Sell Signal

BlockBeats reports that on June 7, Bank of America strategist Michael Hartnett warned that after global stock markets hit a record high this week, a technical "sell" signal is about to be triggered. He stated that the market is currently overheating after surging 20% in just two months.

He cited fund flow and market breadth data as evidence of investors flocking to risk assets and being over-positioned. Traders often view this as a bearish signal because, theoretically, it can indicate that market buying power may soon be exhausted, making prices susceptible to a pullback. The data Hartnett referenced shows that in the past four weeks, funds flowing into stocks and high-yield bonds accounted for 0.9% of total assets.

He stated that if this figure rises above 1%, it would be a sign for investors to sell. Meanwhile, the market is approaching the "overbought zone." About 84% of country indices are above their 50-day and 200-day moving averages. He indicated that when this indicator reaches 88%, his sell trigger point will be reached. (Jin10)