BAML's Sell Side Indicator - meant as a contrarian read as it tracks the average weighting strategists are recommending for stocks - rose to 52.9 in August. While on the rise (it's a 16-month high), the weighting is still on the low side and thus seen as bullish for stocks going forward.
As comparison, the read at the March 2009 bottom was slightly above the level seen last month. In late 2007, it rose to nearly 67%. The indicator printed an all-time low of 43.9% in July 2012 with the DJIA (DIA) around 13K and the S&P 500 (SPY) near 1,300.
The long-term average stock weighting is in the 60-65% range.
Plugging the data into her models, BAML's equity and quant strategist Savita Subramanian sees a 17% return for the S&P 500 over the next 12 months. Her current year-end target is 1,750 (vs. today's 1,640).