The Bank of America Bull & Bear Indicator has dropped to 7.4 from 8.1, ending a contrarian sell signal that had been active since May 26. The gauge, which ranges from 0 to 10, now sits in the neutral zone. Readings above 8 suggest a sell signal, while those below 2 indicate a buy opportunity.
The decline in the indicator reflects weaker global stock market performance, bearish hedge fund positioning in oil and S&P 500 futures, and reduced bullish sentiment in gold futures. Additionally, there were softer inflows into high-yield and emerging-market debt, though technology funds saw some inflows that partially offset these pressures.
For the week ending October 14, global stock funds received $64.5 billion, with $39.1 billion allocated to U.S. equities. In contrast, crypto funds experienced $600 million in outflows during the same period.
Bank of America strategists, led by Michael Hartnett, advised a cautious approach for the next three to four weeks. They cited concerns over real yields, geopolitical risks, U.S. midterm uncertainty, and weak performance among AI-linked stocks. A separate, older version of the indicator stood at 5.1, down from 5.6 the prior week and 8.0 on September 1.