BofA: 'SELL-SIGNAL TRIGGERED'
It's been a historic month for fund flows into the stock markets, and the final week of January was no exception.
This week, total flows into equity funds amounted to $18.8 billion, making it the third-largest week on record.
Click here for a detailed breakdown of this week's fund flow data >
In a note to clients this morning titled "Sell-Signal Triggered," BofA Merrill Lynch strategist Michael Hartnett says flow signals are now pointing to a correction, or a decent-sized sell-off.
According to Hartnett, last time this signal was triggered, in January 2011, an 8 percent correction on the MSCI All World Country Index (an index of global stocks) followed over the course of February and March.
BofA Merrill Lynch Global Investment Strategy, EPFR Global
Hartnett writes, "On average, a 'sell' signal precedes a 5 percent correction in global stocks over the subsequent 4-5 weeks."
We've seen a lot of similar calls from other strategists in recent days. Citi strategists, for example, sees these flows as seasonal, which indicates to them that a correction is looming.
Read more: businessinsider.com |
