David Darst, the Morgan Stanley chief investment strategist, has six boxes on his bear market checklist, and none of them are filled in yet.
"…he certainly sees danger that conditions could change, particularly in the case of policy mistakes. But the current trajectory is higher."
2. Are stock price valuations stretched?
3. Is investor euphoria present?
4. Are bond spreads widening?
5. Is there a recession looming?
6. Are transportation stocks, small caps and bank stocks retreating?
David Levy, chairman of the Jerome Levy Forecasting Center:
“From surging bank stock prices to rising Manhattan coop values, all present bull markets are zero-interest-rate bull markets,” Levy wrote recently. These bull markets are occurring in an environment of high private-sector debts and limited growth potential, and therefore are “intrinsically speculative, limited in their potential, fragile and ultimately capable of severe declines.”
… No one’s sure when the reckoning will take place, but it’s likely to be ugly when it does.” Story at
Friday, the S&P 500 was up 0.4% to 1,634 (rounded
The NTSM system sold at 1575 on 16 April. (This is just another reminder that I should follow the NTSM analysis and not act emotionally – I am under-performing my own system by about 2%!)