With all those declines, the BofAML Bull & Bear Indicator fell to 1.8, which Hartnett and team describe as an «extreme bear» reading.
After a difficult few trading days in the beginning of the year, U. S. stocks are bouncing back with meaningful gains on Monday following Friday’s strong rally. The S&P 500, Dow Jones Industrial Average and Nasdaq 100 were all up by more than half a percent by midday. It looks like investors could be taking advantage of the end-of-the-year declines, but is this a wise time to be buying?
Trying to time the bottom of the market will almost always be a fool’s errand, but one firm suggests equities could have much farther to fall before they hit bottom in 2019.
Q3 hedge fund letters, conference, scoops etc
In their «Flow Show» report last week, Bank of America Merrill Lynch Chief Investment Strategist Michael Hartnett and team suggested that it is time to buy, but stocks probably aren’t yet at the «Big Low of ’19.» They calculated flows for each major asset. The U. S. dollar was up 4.4%, while cash was up 1.9%. Bonds were down 1.2%, equities fell 8.7% and commodities declined 13.1%.
They also said 2018 was the first year cash has outperformed both bonds and stocks since 2000. With a dramatic flourish, they described the stock market in 2018 as «Apocalypse Dow» filled with «horror» since the «Big Top of Jan’ 18.»
All that drama seems warranted since the global equity market has shed $19.
