BofA Bull&Bear Indicator Hits Highest Sell Signal Since 2021 Pandemic Rally

According to BofA's Bull&Bear Indicator report released on July 25, the index reached 9.6 last week, marking the highest sell signal since the 2021 pandemic-driven stock market rally. The indicator, which measures investor sentiment on a 0-10 scale, acts as a contrarian signal; higher readings suggest extreme investor optimism and trigger sell alerts.

Based on BofA's analysis of 17 sell signals since 2002, global equity markets have historically declined an average of 2-3% over three months following such signals, with maximum declines reaching 15-20%.