When it comes to Asian and emerging market equities, there’s no shortage of pessimism.

For instance, foreign money is fleeing Asia EMs at the third fastest pace in 16 years:

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The recent exodus wiped out 14 months of prior inflows, Goldman wrote last week. 

When it comes to emerging markets more generally, Q2 was the worst quarter since 2015 (when Chinese equities were crashing and the PBoC was busy trying to control the pace of the yuan devaluation by liquidating U.S. debt holdings).

Wall Street’s biggest banks are a bit divided when it comes to whether EM’s recent trials and tribulations are a buying opportunity or a knife-catching “opportunity”, but you’d be forgiven for casting a wary eye at bullish sentiment. After all, the headwind from a stronger dollar and a hawkish Fed isn’t abating and Monday’s news out of Turkey offered a stark reminder that idiosyncratic, country-specific risk is always lurking in the background somewhere.

In an interview with Goldman published this week, Mohamed El-Erian offered the following assessment when asked by the bank’s Allison Nathan if he was “pessimistic” about the prospects for EM:

I wouldn’t label myself as a pessimist but rather as someone who respects market technicals. The key for EM investors as a whole is less the fundamental picture, and more the fact that the technical cycle has turned against them. These cycles are a classic EM phenomenon, and my gut feeling is we’re probably only halfway through this one.

With that as the backdrop, it’s worth noting that BofAML’s Risk-Love equity sentiment indicators for Asia and emerging markets have collapsed into what the bank described on Wednesday as “the lowest tenth decile of 23+ year history, a complete reversal of the bullishness we saw in mid-January.”

Have a look at this:

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BofAML offers the following accompanying color:

The set up was poor, in hindsight, in mid-January. Equity Risk-love was in Euphoria, globally, in Asia and in Emerging markets. The view on the Dollar was quite evidently pessimistic. Markets did what they needed to in order to make this skewed consensus wrong. The Dollar rallied sharply (5.3%), Asia ex-Japan equities are down 13.6% from the January peak, EM equities by 15.5%. Chinese monetary policy tightened appreciably, the US Fed Balance sheet contraction hurt EM currencies, and trade war chatter didn’t help.

Now I’ll ask you, folks, again: who wants to catch a falling knife?