MAJOR CONTRARIAN SELL SIGNAL: Investors Are More Bullish Than In 99% Of All Periods Since 2002

BofA's proprietary measure of investor sentiment is clocking in at extreme levels.

According to the firm's Bull & Bear Index, which tracks sentiment using indicators like hedge fund market exposure, fund flows, long-only investor positioning and so forth, investors are more bullish than they were in 99% of periods since 2002.

The current B&B reading is 9.6 (on a scale of 0 for max bearish and 10 for max bullish). It suggests investor sentiment is currently more bullish than 99% of all readings since 2002. Extreme bullishness is characterized by robust inflows to EM equity funds, overbought high-yield credit markets relative to treasuries and aggressive hedge fund positions for a weaker yen and stronger oil prices.

What's even worse. This extreme surge in bullishness comes even as there's been a breakdown of late in the economic data, as measured by the BofA/ML Economic Surprise Index.

Thus bulls should have reason to worry. Everyone is bullish, and lately he data isn't holding up so hot, relative to expectations.

In the meantime, the moment of truth for the economy approaches >