Morgan Stanley issues "full house sell signal"
By Polya Lesova
Last Update: 9:14 AM ET Jun 6, 2007
NEW YORK (MarketWatch) -- Morgan Stanley has issued a "full house sell signal" as of Monday, saying three of its leading indicators - bond yields, Institute for Supply Management new orders, as well as valuation and risk - showed it was time to sell. "Such a full house sell signal across these three indicators is rare, and has occurred only five times since 1980," said analyst Teun Draaisma in a European strategy research report. "Equities have always been down in the next 6 months, on average by 15%. Previous occasions include September 1987 and April 2002. We prefer to be on the right side of those odds." Draaisma also said that cautious sentiment can negate a valuation sell signal.
