Bank of America’s May Global Fund Manager Survey indicates potential for choppy trading ahead. The report identifies three contrarian sell signals following the largest one-month rush into stocks on record.
Equity allocations reached a net 50% overweight position. Cash levels dropped to 3.9%. The bank's Bull & Bear Indicator climbed to 7.8.
Investors are heavily overweight in cyclical stocks, technology, and commodities compared to defensive sectors. This extreme bullish sentiment historically precedes a market pullback.