Bank of America Indicator Signals 'Buy' Amid Extreme Bearish Sentiment, Historically Hinting at Gains

Bank of America's Bull and Bear Indicator recently signaled "buy", suggesting potential 5% median gain

Signal comes amid strong bearish sentiment towards equities

Indicator designed to signal "buy" in extremely bearish conditions

Current bearishness driven by EM debt, HY bond, stock outflows and rise in cash allocations

Indicator's past 20 "buy" signals resulted in median 3-month returns of 5.4% for US stocks, 7.6% for global stocks

Sentiment surveys like Fear and Greed Index reflect increased bearishness from rising yields, falling prices

BofA expects S&P 500 support at 4,200 to hold short-term, signaling stable conditions

But analysts warn if support breaks and 10-year yield hits 5%, could indicate imminent credit event or hard landing