Bank of America strategist Michael Hartnett warned that after global stock markets hit record highs this week, they are about to trigger technical “sell” signals. He said the market is currently overheated after soaring 20% in just two months. He cites data on capital flows and market breadth as evidence that investors are pouring into risky assets and that their positions are too high. Traders often use this as a bearish signal because in theory it can indicate that the market's purchasing power may soon run out and prices can easily pull back.

Bank of America strategist Michael Hartnett warned that after global stock markets hit record highs this week, they are about to trigger technical “sell” signals. He said the market is currently overheated after soaring 20% in just two months. He cites data on capital flows and market breadth as evidence that investors are pouring into risky assets and that their positions are too high. Traders often use this as a bearish signal because in theory it can indicate that the market's purchasing power may soon run out and prices can easily pull back.