In its latest report, Bank of America (BofA) flagged that its stock market reversal indicator has risen over the past month, reflecting a relatively high level of sentiment in Wall Street markets. However, considering that the indicator is currently in a 'neutral' state and has not entered the critical 'buy' or 'sell' zones, it suggests that the momentum behind the stock market's extreme pessimism-driven rally last year has dissipated. BofA's senior analyst Savita Subramanian and her team noted that in July, the so-called sell-side indicator (SSI) rose by 30 basis points to 55.6%. This metric tracks the average recommendation levels for US equity allocations in balanced funds by strategists. The report mentioned that this metric reached its highest level since early 2022, but remained below the average, indicating that current market optimism has not yet reached a level that could trigger risks. Subramanian further analyzed that while the overall potential for short-term upside for the S&P 500 index may be limited, investors can still seek opportunities for good returns within the index.