Stock market crash: BofA indicators say September meltdown may persist - Business Insider

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Bank of America lays out the under-the-radar indicators showing that huge swaths of the stock market are 'running on fumes' — and warns a September meltdown may just be getting started

Even before the sell-off occurred, several institutional investors had advised clients to temper bullishness with caution — especially in a year full of surprises., for example, shifted to a mild underweight on developed-market stocks amid the frantic rally.

"Even with a strong summer rally for US equities, there are plenty of bearish divergences across indicators moving into the worst month of the year of September," Suttmeier said in a recent note. for stocks on average since 1950, and October has also been weak in election years, according to data compiled by LPL Financial. The potential dangers ahead for investors go beyond what the almanac says. Suttmeier lays out several technical indicators that did not improve while stocks ripped higher during the summer.

The share of stocks above their 10-, 50-, and 200-day moving averages is lower now than it was in June, when the market last experienced a drawdown of note. Technical analysts consider it bearish when a stock's spot price falls below one of these longer-term averages.

 

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