Barry Ritholtz: 'After The Fed Liquidity Fountain This Is The Most Bullish Thing'

Many investors watch the sell-side indicator –  a contrarian indicator that measures the bullishness and bearishness of Wall Street analysts – for signs of a buy signal.

Earlier today, Bank of America’s Savita Subramanian wrote that the indicator is flashing the biggest buy signal in 27-years.

Now, Barry Ritholtz, CEO of Fusion IQ writes on his blog that this is the most bullish thing he can think of:

“After the Fed liquidity fountain, this is perhaps the single most bullish thing I can think of. The difference being the Fed juicing is an artificial external input into markets; excess bearishness is pure behavioural finance at work.” 

Ritholtz wrote that the key thing to investing and running an asset allocation model is not stock picking but figuring out when to sell.

Here is a chart of Bank of America’s sell-side indicator:

Photo: BofA Merrill Lynch

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