BofA: 'SELL-SIGNAL TRIGGERED'
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It's been a historic month for fund flows into the stock markets, and the final week of January was no exception.
This week, total flows into equity funds amounted to $18.8 billion, making it the third-largest week on record.
In a note to clients this morning titled "Sell-Signal Triggered," BofA Merrill Lynch strategist Michael Hartnett says flow signals are now pointing to a correction, or a decent-sized sell-off.
According to Hartnett, last time this signal was triggered, in January 2011, an 8 percent correction on the MSCI All World Country Index (an index of global stocks) followed over the course of February and March.
Hartnett writes, "On average, a 'sell' signal precedes a 5 percent correction in global stocks over the subsequent 4-5 weeks."
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