Pragcap looked and looked and looked and found it. One lone bank afloat in bull-land sea sees risk in the market waters. – Ilene
MORGAN STANLEY: PREPARE FOR A SELL-OFF
Courtesy of The Pragmatic Capitalist
It wasn’t easy to find in this sea of bulls, but there is actually a bank out there that is not full-blown bullish following the huge rally of the last month. Morgan
Morgan Stanley says these two risks could overshadow the market in the coming weeks as investors adjust their portfolios to account for the large discrepancy between bulls/bears and risk assets versus lower risk assets. According to Morgan Stanley the put/call ratio represents overly bullish sentiment levels that are historically followed by sell-offs. In addition, the sign of excessive risk can be best seen in the run-up in the small cap vs. large cap ratio. Risk assets, represented by the Russell here, have surged to their highest ratio in terms of large caps in the last 12 months:
Source: Morgan Stanley