A crescendo of panic selling is the one missing ingredient to a year-end stock market rally

• The stock market is missing one key ingredient to mount a year-end rally, according to Bank of America.
• The bank said that a crescendo of panic selling, or capitulation, is necessary for stocks to bottom in October.
• Favorable fourth-quarter seasonal patterns would support a year-end rally if the capitulation event materializes.

The US stock market is missing one key ingredient for a year-end rally to materialize, according to a recent note from Bank of America.

The bank said that a crescendo of panic selling, or capitulation, by investors in October would set the stock market up well for it to continue rising into the last two months of the year.