BofA fund manager survey triggers first sell signal since just before February crash

  • Nearly everyone is bullish, says Michael Hartnett and team, following the results of Bank of America's latest Fund Manager Survey. Investment pros, says Hartnett, are adding to longs in consumer names, commodities, and emerging markets.
  • Cash levels have fallen to 4%, trigging a contrarian sell signal. The last time this happened was February, and we know what happened next.
  • Of economic expectations, there's never been a "V-shaped" recovery like the one just experienced, with 70% of those surveyed believing we're in the early stage of a new growth cycle, and just 12% believing we're in a recession.
  • Of expectations for the next 12 months, a full 89% expect stronger economic growth in 2021.
  • Given the above, it shouldn't be too much of a surprise that a record number of respondents expect small caps will outperform large caps in coming months.
  • A few related ETFs: TQQQ, IVV, SH, SQQQ, SDS, SPXL, USA, RSP, UPRO, SPXU, SPXS
  • One month ago on release of November's fund manager survey, Hartnett suggested a "topping process" was underway.

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