Contrarian warning

Despite a number of bullish themes that emerged from today’s Bank of America Merrill Lynch survey for November, the group warned a fall in cash levels showed there are clear contrarian signals embedded in the message.

According to BofA Merrill Lynch, five out of the last six times going back to 2004, that cash levels have hit 3.5% or below, there has been a negative reaction in equity markets over the course of the next four weeks. As at 12.45pm, Tuesday afternoon the FTSE 100 had fallen 1.48% in the day.

Great timing for the survey, but probably a bit too short-term at this stage to see if Merrill Lynch will make it six out seven.