Bank of America has updated its bull and bear indicator that, as you know, we are following with great interest, because so far it has never failed, giving magnificent medium-term buying signals and warning of overheating.
In this week’s update the indicator is at 5.9 compared to 6.1 from the previous week. indices at all-time highs.
Here is the updated sub-indicator families march
And here is the historical graph of the indicator updated to the current date:
In this article you can read what are the reactions of the markets when they reach high heights, Up to 3 months there are problems.
The average decline after 3 months of the signal in the SP 500 was -9% no less, while the bonds had fallen in that time an average of 45 basis points of profitability.
List of other indicators published in this study
We go with the cash flows during the week.
$ 23.2 billion of inflows into equity funds. It is a very high amount.
12.700 million tickets in bonds, money keeps coming in every week.
25.1 billion cash inflows.
300 million gold exits, which does not seem to enjoy investor favor now that it is back against the 200 average.
We are now going to focus the shot on the bags in particular:
It is said a lot that Europe is what matters now but money has not backed it in recent weeks.
As for Harnett’s vision.
He believes that the liquidity trap that the Fed has gotten into is benefiting Wall Street and may do so for a while longer, see this quote:
A Fed in a “liquidity trap” of its own making; investors in 21 know that in the absence of:
monthly impressions of US payroll above 1 million, an acceleration of bank lending to businesses and the real world, a large “soft” stimulus of more than 3.5 million dollars for infrastructure in the US , The trend of maximum liquidity and minimum rates will continue to benefit Wall St; And if payrolls falter, even with (because of?) high wages, investors will discount the reversal of the yield curve.
It also continues to recommend the same as last week that is: Defensive values in economies with advanced vaccinations such as the US and Europe. And cyclical values and favored by the reopening in emerging countries, Japan and China, that is, in his opinion, in countries that are going to grow in the vaccination process.
Jose Luis Carpathians