Frank Cross: Well, it’s a little late for this kind of feedback.

Eliot Loudermilk: That’s because it’s the first time I’ve seen it, sir.

Frank Cross: You’re right, I sprung it on you.

Sometime during, or maybe just before, the escalatory de-leveraging which drove big-cap US tech shares to their worst single-session loss in a year, one of Wall Street’s most recognizable names gently suggested investors take cover.

“Too many red flags. Take profits,” read the title of a short dispatch dated June 5. The author: Savita Subramanian, BofA’s top name in equities research.

Subramanian, hardly a perennial bear even as her year-end price target for the index suggests downside from current levels, warned clients that seven of 10 so-called “bear market signposts” are now triggered, up from five last month. That, she said, is “in line with the average ahead of prior market peaks.”

The table above lays out those signposts. It’s worth mentioning that if the historical relationship between the US unemployment rate and headline CPI’s any indication, the market will check an eighth signpost in the months ahead (inverted yield curve).

At the same time, the S&P’s expensive on 17 of the 20 valuation metrics Subramanian tracks. More concerning still: The index trades rich compared to the dot-com bubble on eight of those metrics, even as Subramanian reminded investors that “comparing today’s index valuation to that of the 80s, 90s, 2000s and 2010s is apples to oranges.” (She’s the recognized authority on that talking point.)

In the same piece, Subramanian flagged the figure on the right, below, as particularly notable.

As you can see, return dispersion within tech went parabolic in recent months, and now rivals dot-com levels.

“Dispersion has been most pronounced within Tech, where the spread between the best/worst performing quintiles’ median stock is a whopping +120ppt, the highest since February 2000, ahead of the market peak of March 24, 2000,” Subramanian said.

Although tech fundamentals are unequivocally healthier today, “many metrics have worsened” of late, she went on. “Cash flow conversion has flat-lined, IG and equity supply has increased, buybacks as a percent of market cap have slowed and capex as a percent of operating cash flow for hyper-scalers is forecast to reach nearly 100% by year-end, up from 40% in 2023.”

Subramanian’s year-end target for the index remains 7100.