BofA Is Still Not Buying It: “Everyone (Including Ourselves) Is A Seller Into Strength”

Friday, February 26, 2016
By Paul Martin

by Tyler Durden

With the S&P retesting its stubborn support level of 1,812 as recently as a week ago, many have continued to predict that failures to breach said level would result in violent bear market rallies, most recently JPM which however “should be faded”, as it noted three weeks ago, looked at earnings and said that “16x and $120 create a firm ceiling at ~1950 and thus moves toward that level should be faded.”

Others such as BofA’s Michael Harnett, and overnight Citi, went so far as saying that unless the G-20 comes out with a big stimulative surprise, it would open the path for the market’s next leg lower, below this critical support.

Since then the market has indeed been gripped in the latest furious short squeeze, which as of right now has the S&P trading some 150 higher in under two weeks, at about 1962.

So has that change the big picture? Not for Bank of America.

In a note released overnight by BofA’s Chief Investment Strategist, Michael Hartnett, he looks at the surge into gold, which as previously noted was the biggest 3 week inflow since January 2009.”

>Everyone (including ourselves) a “seller into strength” which means risk can squeeze higher short-term into policy events...G20 (2/26-27), ECB (3/10), BoJ (3/15) & FOMC (3/16); flows nonetheless not close to “full-capitulation” levels.

The Rest…HERE

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