The DJIA is looking to open down a couple hundred points.
This fellow is worth listening to. We linked to a couple of his prior calls*, which turned out to be timely and accurate. (see below)
From FT Alphaville:
And from MarketBeat:
There was much excitement a month ago when Morgan Stanley strategist Teun Draaisma, announced a “full house” buy signal from the four key indicators he follows (Valuation, Capitulation, Risk and Fundamentals, if you are interested).
Apparently, this was the strongest signal to buy equities in six years and the indicators had a near perfect track record.
But after last week’s record breaking rally for global equity markets, Draaisma has turned bearish, downgrading equities to “neutral” from “overweight”.
Draaisma says the case for a bear market rally is still there, but with markets swinging around violently and fundamentals still poor, the game has become much more dangerous....MOREPatience is the preferred virtue, cash the preferred asset in bear markets. Equities have already reached fair value, in our view, but big valuation overshoots are typically followed by big valuation undershoots, and the 2000 valuation overshoot was the biggest ever.
Don’t Get Too Excited About This Rally
Broad indexes have risen 20% from their lows six trading sessions ago; in this market, that means they are still in the danger zone, and investors shouldn’t celebrate a new bull market yet.*February, 2008
The Standard & Poor’s 500 closed Friday at 896.24, up 19% from its closing low of 752.44 on Nov. 20. That would look like a definitive turnaround if it were not for the fact that the S&P 500 managed a similar rally between Oct. 27 and Nov. 4, when it rose 18%. When the stock market is enduring its most volatile year since the 1930s, 19% isn’t a big cushion above the lows.Plus, in the last bear market, the S&P 500 had two rallies of roughly 20% in 2001 before ultimately finding its feet in October 2002. The Dow Jones Industrial Average is up 18% from its low on Nov. 20, though it remains down 34% for 2008....MORE
Draaisma: stand by for a bear market rally
Even when things are glum, Morgan Stanley former super-bull Teun Draaisma is unreformed. In his latest note, the MS equities man is starting to grow weary of all that bearishness since November....November, 2007
Morgan Stanley Strategist: Out of Equities