A bear-market rally may be hiding, but investors should ‘sell any rip’, he said

Despite seeing huge losses for the stock market so far this year, it is not over yet – and investors should sell at a higher big rebound.

This is the advice of a team of Bank of America strategists led by Michael Hartnett in their Friday “Flow Show” note. There has been growing controversy over whether the focus for the bank has capitalized on the market, which has prompted investors to give up trying to recover lost profits.

Some strategists see capitalization at the bottom of the market and see it as a good time to buy stocks. However, even for Dow Industrial DJIA, the drop is about 1,200-points,
-0.62%
Earlier this week, a bear market for the Nasdaq Composite Comp,
-0.85%
And one near the S&P 500 SPX,
-0.68%
Not everyone believed the sale was over.

The stock is rising on Friday morning, but the big indicators are still set to add a weekly loss string.

Read: The technologist called 2020 Market Bottom says there is a ‘shocking assembly’ store

Bank of America noted higher cash levels for investors এটি it reported earlier this week that global fund managers had the highest cash allocations since 2001 — and both its own inverse bull / bear indicators point to surrender.

Bofa Global Research

But other parts of the puzzle are missing, they said. For example, both institutional and private client flows of a bank are not in the capitulation lot. Among its individual clients with $ 2.9 trillion in assets under management, 62.8% is allocated to stock (lowest since February 2021), 18% to bonds (highest since July 2021) and 12.1% to cash (highest since January 2021).

Of course, they should remember that there is no “true surrender” involved in the Federal Reserve’s view. This means a large market pullback that makes it easier for the central bank to tighten monetary policy. A systemic event and an increase in the unemployment rate would be needed first, Hartnett said.

Bofa Global Research

The bottom line is that the stock market is “very weak.” [a] Beer assembly, but we’ll still argue ‘sell any rip,’ Hartnett and team say.

One more thing for investors to note, the crash of the last 40 years has involved the rapid appreciation of the Japanese yen USDJPY,
+ 0.03%,
They note:

Bofa Global Research

Read: How long does the average bear market last? Dow, near the sell-off threshold, has dropped the S&P 500.

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