{"id":30223,"date":"2018-01-26T15:32:09","date_gmt":"2018-01-26T20:32:09","guid":{"rendered":"http:\/\/olduvai.ca\/?p=30223"},"modified":"2018-01-26T15:32:20","modified_gmt":"2018-01-26T20:32:20","slug":"one-of-bofas-imminent-market-crash-indicators-was-just-triggered","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=30223","title":{"rendered":"One of BofA’s “Imminent Market Crash” Indicators Was Just Triggered"},"content":{"rendered":"
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One of BofA’s “Imminent Market Crash” Indicators Was Just Triggered<\/a><\/span><\/h3>\n<\/div>\n
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Early last month<\/a>, we showed that one of Bank of America’s “guaranteed bear market<\/em>” indicators, namely the three-month earnings estimate revision ratio (ERR) which since 1988 has had a 100% hit rate of predicting upcoming bear markets, was just triggered. As Bank of America explained at the time, “since 1986, a bear market has followed each time that the ERR rule has been triggered.”<\/strong><\/p>\n

<\/a><\/p>\n

The only weakness of that particular indicator is that while a bear market always followed, the timing was unclear and the upcoming bear could arrive as late as two years after the trigger hit.<\/p>\n

Well, fast forward to today when overnight another proprietary “guaranteed bear market” indicator created by the Bank of America quants was just triggered.<\/p>\n

As we explained earlier today, as part of the unprecedented, historic rush to dump cash and buy any stocks that one can find, BofA’s “Bull & Bear indicator” surged to 7.9 – effectively 8 – a level that is indicative of broad market euphoria, and the highest it has been since March of 2013, or nearly 5 years ago.<\/p>\n

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There is another, far more important, reason why the triggering of the Bull and Bear Indicator is a remarkable event: according to Bank of America back-tests, not only does this particular indicator also have a 100% hit rate once triggered…<\/strong><\/p>\n

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… but on 11 out of 11 signals since 2002, the market dropped on average 12% after it was triggered.<\/strong><\/p>\n

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And yes, it also works in the opposite direction: the last Bull & Bear indicator flashed was a buy signal of 0 on Feb 11th 2016. <\/strong>Since then the S&P has been up on 22 of the next 23 months.<\/p>\n

Finally, and most importantly, unlike other “bear market” indicators which confirm if <\/strong><\/em>a crash is imminent but not when, <\/strong><\/em>this one gives an explicit time window: the market always dumps within the next 3 months once a Sell signal has been trigerred. <\/strong><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

One of BofA’s “Imminent Market Crash” Indicators Was Just Triggered Early last month, we showed that one of Bank of America’s “guaranteed bear market” indicators, namely the three-month earnings estimate revision ratio (ERR) which since 1988 has had a 100% hit rate of predicting upcoming bear markets, was just triggered. As Bank of America explained […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3038,1750,18163,501,690,4318],"class_list":["post-30223","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-america","tag-bear-market","tag-earnings-estimate-revision-ratio","tag-market-crash","tag-risk","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=30223"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30223\/revisions"}],"predecessor-version":[{"id":30225,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30223\/revisions\/30225"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}