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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 680.44

+0.6%

Dec 19 4:00 PM EST

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To: Psycho-Social who wrote (71229)	3/5/2001 12:45:36 AM
From: Abner Hosmer	Read Replies (1) of 99985

Merrill Lynch has an indicator they call the "Sell Side Indicator." They've been keeping this since 1985. It's a contrary indicator based on Wall Street's consensus recommended asset allocation. The reading on Feb. 28 was 66.7%, beating the previous record of 66.4% set in January. Basically what this means is that the typical Wall Street Strategist is recommending that a balanced fund be 66.7% in equities. A sell signal is generated above 58.4% and a buy below 50.4%. The indicator got ahead of the market in mid 1998, but appears to have been pretty good at calling the bottoms. The expected 12 month return on stocks according to their model is essentially zero at this point. ML calls this ""our most reliable quantitative market-timing barometer."

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