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Daniel Gross, Yahoo Finance

Investors swear by market indicators. Some, like Jeff Hirsch of the Stock Trader’s Almanac, place their faith in the presidential cycle. Others focus on inflows to mutual funds. Still others look at more offbeat metrics like hemlines or Super Bowl winners. Roy Soifer, a veteran banking industry analyst and consultant, looks to the career choices of Harvard MBA students. And it may come as a surprise that their relative preference for jobs in finance is something of a contrary indicator. In other words, when a large chunk of the latest crop of freshly minted MBAs decamps Cambridge for Manhattan — look out below!

The data on career choices by Harvard Business School graduates is made public here. Typically, financial services accounts for the largest chunk of jobs — about 34 percent for the Class of 2010. Soifer backs out those going into commercial banking and insurance and charts the numbers going into “market-sensitive positions” — hedge funds, investment banking, private equity, etc. When 30 percent or more go into “market-sensitive” trades, it’s a long-term sell signal. In the spring of 2008, a record 41 percent of the graduating class went into “market-sensitive” jobs. We all know what happened a few months later. In the Class of 2009, only 28 percent went to such Wall Street jobs — a neutral indicator. But this year, as the markets revived, Harvard MBAs flew south to their natural habitat in greater numbers. Between 31 and 32 percent of the Class of 2010 are now happily ensconced in “market-sensitive” jobs, counting down the days until they receive their first bonuses. The upshot: Be concerned.

What gives? Why do HBS graduates zig when investors should zag? Harvard Business School students may be future leaders. But like many high achievers in their 20s, they’re insecure trend-followers. The entrepreneurs and rebels (Mark Zuckerberg, Bill Gates) tend to drop out of Harvard as undergraduates, not spend two years studying the finer points of finance on the far bank of the Charles River.

Soifer suggests the relationship is more a commentary on Wall Street firms than on the students. Business students are taught to respond to incentives.”Like other people who have hundreds of thousands of dollars of student loans to pay back, many of them respond to what the most aggressive recruiters are offering.” And the industries that have had a few good years, that are feeling flush and confident (and hence are ripe for a fall), are the ones that come to campus armed with the most significant incentives. “When Mr. Market is buying, what should you do?” Soifer asks, rhetorically. Conversely, when Wall Street firms are shocked, cowering and fearful — and hence reluctant to hire — that’s usually a good time to plow cash into stocks.

Something to keep in mind: When it comes out, the data represent decisions made up to a year prior. Soifer, who has been examining this data for three decades, says the Harvard MBA indicator isn’t a fool-proof market-timing mechanism. The high number of grads going to Wall Street in the Class of 2005 indicated a sell. “It was right, two years later,” he says.

But there have been some extremely telling data points. When none of the best young business minds in the country want to go to Wall Street, it’s a pretty good time to go long. The low point was in 1937, when only three — count ’em, three — newly minted MBAs went to Wall Street (about one percent of graduates). And that was a good time to buy stocks. When Soifer graduated from Harvard Business School in 1965 (he stayed on to do graduate work), the percentage of graduates who went to Wall Street was in the mid-teens. “There was a good reason for that,” notes Soifer. “Starting salaries at Wall Street were very low.” A huge and long-running bull market started the next year.

Finally, the actions of a mass of HBS alumni might not be as influential as the actions of a single graduate of Harvard College: Federal Reserve Chairman Ben Bernanke. Says Soifer, “The one note of caution I would add this year is that the indicator doesn’t take QE2, and a possible QE3 and QE4, into account.”