Bank of America Analysts on Sell Side Indicator

Investing.com — Bank of America analysts reported that their Sell Side Indicator (SSI) is becoming increasingly bullish as strategists raise equity allocations.

In August, the SSI rose by 61 basis points to 56.2%, its highest level in nearly 2.5 years. This is the second consecutive month of improvement, reflecting growing optimism among strategists despite market volatility.

BofA noted that strategists were encouraged by signs of improving market breadth and dovish comments from Federal Reserve Chair Jerome Powell at Jackson Hole, leading to increased equity allocations.

According to BofA, the SSI serves as a reliable contrarian indicator, often bullish when Wall Street is bearish. Currently, it remains in Neutral territory but is approaching a Sell signal, just 1.8 percentage points away—its closest since January 2022.

Despite this increasing optimism, buy side positioning appears more cautious, with funds divesting from cyclical sectors like Materials, Energy, and Discretionary, maintaining low Beta exposure. The recent Bank of America Fund Manager Survey also reflected lower growth expectations and a reduced risk appetite.

On the retail side, however, sentiment shows signs of recovery, with the American Association of Individual Investors (AAII) bull-bear spread at 24% net bullish, bouncing back from a 3% decline in early August.