Investors Preparing to Buy Stocks When Market Dips

The pendulum has been swinging hard for equity investors lately.

The S&P 500 SPX, +1.23% is poised for its best weekly performance of the year thus far (and since November), on the heels of the worst five-day return of 2019 to date.

Egged on by comments from Federal Reserve Chairman Jerome Powell, investors have been snapping up stocks on hopes a near-term U.S. interest rate cut is on the cards.

The pressure may only increase after a U.S. jobs report showed a far lower-than-expected were created. (see economy). But it’s also worth mentioning at this juncture how wrong the market can be when it comes to predicting Fed moves.

Despite the apparent fever for stocks lately, others see investors still reluctant to pile into this market. Wall Street stocks have rallied hard since the December meltdown—the S&P 500 is up 13% even if May stank—and global trade worries refuse to go away.

That brings us to our call of the day from strategists at Bank of America Merrill Lynch, who say their key contrarian indicator reveals investors are so bearish it might be time to start buying stocks.

Read the full article at Market Watch.