Serenity: Be cautious of Bank of America's bearish stance; massive negative news often emerges when institutions need liquidity

Odaily Planet Daily reports that Serenity posted on X, stating that for those currently citing Bank of America's bearish view, they need to remember that in March this year, Bank of America claimed that EWY/KOSPI, namely SK hynix and Samsung-related South Korean memory chip stocks, were in an extreme bubble state. At that time, Bank of America attributed the rise to retail investors, implied that retail investors should sell their South Korean memory chip stocks, and even compared it to the 2008 financial crisis, the internet bubble, and the decline in silver. Serenity stated that shortly after retail investors subsequently sold their long positions, memory chip stocks instead rose to record highs.

Serenity stated that institutions are not your friends. Typically, when an unusually large amount of negative news appears, it is because institutions need liquidity. Previously, BofA Securities indicated that investors should remain cautious about U.S. stocks, as increasing bear market signals suggest the market is approaching a peak. A team of strategists led by Savita Subramanian wrote in a report dated June 5 that currently, about 70% of the bear market signals have been triggered, consistent with the average level during historical market tops. The S&P 500 shows statistically significant overvaluation in 17 out of 20 valuation metrics, with 8 of those metrics higher than during the tech bubble era. Additionally, high price-to-earnings ratio stocks have significantly outperformed low-valuation stocks, which strategists consider a sign of excessive speculation. Within the technology sector, the gap between the best-performing and worst-performing quintiles has widened to its highest level since February 2000.