We previously explained the obvious similarities (with stocks, bonds, and leveraged positions) with the current period in the market [2] and the end of 2010 and start of 2011 period. Much is once again being made of the 'flows' as $18.8bn (the 3rd largest on record - since 1992) pushed into equities. Retail also bought long-only equities for the fourth straight week ($2.7bn), and $12.2bn was added via ETFs, but the significance of the flows has triggered a "sell" signal for the traders at BofAML. The last time such a sell-signal was triggered was, ironically, late January 2011 - which was followed by an 8% correction. Their Global Flow Trading Rule (based on flows breaking 0.5% of AUM) on average has led to a 5% correction in global stocks over the subsequent 4-5 weeks. Different, this time?
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