According to a recent report by Bank of America Merrill Lynch, recent inflows to stocks are leading to a contrarian sell signal. But is it really a buying opportunity instead?
Investors have been piling into stocks over the past twelve months. While the market as measured by the S&P 500 index is up 23.5% so far in 2013, are these inflows lighting up a contrarian signal for investors to get out while they can?
According to a recent report by Bank of America Merrill Lynch (BAML), $231 billion has gone into stocks this year compared to $16 billion for bonds. BAML says that if another $8 billion to $9 billion come into equity funds in the next two weeks, their models suggest a contrarian sell signal.
Flows to both stock and bond funds were tracking together until May, when Federal Reserve Chairman Ben Bernanke hinted the Fed would possibly taper its $85 billion per month bond-buying operation known as "quantitative easing". That taper talk led toRead More »from This could be a huge contrarian sell sign