LIVE MARKETS-BofA Sell Side Indicator still shows room for more market gains

ReutersFeb 3, 2026 3:34 PM

Nasdaq falls ~1%, S&P 500 dips. Dow slightly positive
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US 10-Year Treasury yield edges up to ~4.29%

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BOFA SELL SIDE INDICATOR STILL SHOWS ROOM FOR MORE MARKET GAINS

BofA Securities Sell Side Indicator (SSI) is a contrarian sentiment signal that tracks sell side strategists' average recommended allocation to equities in a balanced fund.

According to BofA's equity and quant strategist, Savita Subramanian, the indicator was little changed in January, rising 10 basis points to 56.0% (vs. the average monthly move of +/- 50bps over the last decade).

Strategists maintained their equity allocations as the S&P 500 .SPX ended the month up 1.37%, rallying to new highs after falling 2.6% intra-month on rising geopolitical tensions.

Subramanian notes that the SSI remains at its most bullish level since March 2025, but is 1 ppt below its recent peak of 57.0% in January 2025.

"The SSI has been a reliable contrarian indicator. In other words, it has been bullish when Wall Street was extremely bearish and vice versa. The indicator remains in "Neutral" territory but is much closer to a "Sell" signal than a "Buy" (1.7ppt vs. 4.7ppt)," writes Subramanian in a note out on Monday.

She adds, "Its current level of 56% is still below levels reached in prior market peaks (typically >59%) and implies a S&P 500 price return of 12% over the next 12 months."
Although Subramanian says the SSI is still "Neutral," buy-side reported positioning "shows more froth," with fund managers at their most overweight stocks since December 2024.

(Terence Gabriel)

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