The chart shows the flow of money into equity funds and bond funds. As you can see the amount of money going into bond funds is astronomical as money continues to come out of equity funds. This major spread between the two asset classes is often a sign of a buyers market for stocks. The exact opposite occurs when the spread is flipped.
Look just before the tech bubble in 2000 and the financial collapse in 2007 - both times money was flowing into equities at a much higher pace than bonds. The result was market crashes. Now that the spread is opposite, is it a signal of a market that is poised to rally? I would have to say the answer is yes for long-term investors that have at least a 5-10 year time horizon in the market.
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