Bank of America Indicator Flashes Contrarian Buy Signal for Stocks

Bank of America's Bull and Bear Indicator recently entered "extreme bearish" territory, flashing a contrarian buy signal for stocks.

The indicator suggests the stock market tends to see gains in the months after this signal flashes.

The signal was driven by factors like fund outflows and rising cash levels, indicating high bearish sentiment.

The indicator has historially been a decent contrarian indicator, with stocks often rising after it flashes "buy."

BofA strategists say S&P 500 support around 4,200 should hold near-term if bearishness persists, otherwise risks increase.