A reliable stock market indicator from Bank of America just triggered a sell signal
There may be trouble ahead for stocks, according to one signal that has a solid track record.
TL;DR
- Bank of America's Bull & Bear indicator reached 8.5, entering "extreme bullish" territory.
- This indicator has previously flashed sell warnings 16 times since 2002.
- Following past warnings, the MSCI All Country World Index fell 2.4% and the S&P 500 declined 1.2% on average over the next two months.
- Stocks have recently faced headwinds due to concerns over artificial intelligence valuations.
- The S&P 500 is down 1.1% in December, potentially ending a seven-month rally.
- Equity ETFs saw record inflows of $145 billion this week, with U.S. stocks receiving the second-most inflows ever at $77.9 billion.
- The S&P 500 is up 15.2% year-to-date and recently set a record closing high.