Join Goldman Sachs and Morgan Stanley's optimistic camp! Barclays hails: U.S. stocks are showing the best buying opportunity in nearly a year.

Barclays’ Alex Altmann said the U.S. stock market is flashing its strongest buy signal in nearly a year. He has joined a growing chorus of optimism on Wall Street, saying the worst phase of this recent selloff may already be behind us.

The bank’s global equity tactical strategy head, Altmann, said in a client note Tuesday that its stock timing indicator (BETI) fell overnight to -8.3, the lowest level since the Trump tariff flare-up in April of last year. The indicator reached a historically “highly attractive” entry point for stocks.

BETI combines 19 input variables, including market internals, positioning, sentiment, and macroeconomic data, to identify tactical turning points in the stock market. Historical data show that when the indicator is above +7, it signals poor future returns; when it is below -7, it corresponds to a favorable environment for a stock-market rebound.

Barclays data show that since 2015, when the indicator has landed in the -8 to -7 range, the S&P 500 has delivered an average return of 6.6% over the following 42 days, with a win rate as high as 92%. Based on 38 observation samples, the median return over the same period was 5.1%.

On Tuesday, the S&P 500 rose 0.3%, and gained 1.3% so far this week, marking the best two-day performance since the outbreak of the Iran conflict.

The report noted that the latest readings’ pessimism partly reflects a deterioration in the rate of change of the S&P 500 index. Although the index’s pullback from this year’s earlier peak does not look large in absolute terms, given the unusually low volatility and narrow trading range over the prior six months, the pullback stands out as especially notable.

Other factors include the sharp repricing of high-yield credit spreads—even though their absolute level remains relatively moderate—and a steep drop in Barclays’ stock mania indicator, which together suggest bullish sentiment is fading quickly.

Altmann wrote: “The Barclays equity tactical strategy team believes that U.S. stock-market risk remains attractive during this S&P 500 pullback.” He also added that both systematic traders and discretionary traders are holding relatively restrained positions, which could amplify any upside momentum.

A “violent beta short squeeze” may be in the cards

Altmann said that, for now, Commodity Trading Advisor (CTA) positioning is roughly flat or modestly short, while hedge-fund net exposure sits in the 30%-40th percentile range—this market structure increases the possibility of a “violent beta short squeeze” scenario. That means that even if short-term capital participation is not high, it may still drive the equity index back to historical highs.

This month, as geopolitical risks have heated up, U.S. equities have come under pressure in choppy trading, but signs of stabilization have already emerged. The S&P 500 rose 0.4% on Tuesday, and after ending a four-day losing streak on Monday, it rebounded from a key technical support level. Even though the Middle East conflict has entered its third week and concerns remain about potential AI-related impact and unease in private credit, investors have begun “buying the dip.”

Altmann is among the growing number of market experts forecasting a rebound in the stock market. Earlier this week, strategists at Goldman Sachs, Morgan Stanley, and JPMorgan said that earnings growth and valuation (even if still elevated, no longer as extreme as before) will provide support for the market. In early March, Scott Rubner of Citadel Securities also withdrew his bearish view on U.S. equities, citing positive factors such as inflows from retail investors, volatility resets, and seasonal tailwinds.