{"id":438476,"date":"2010-03-17T04:21:00","date_gmt":"2010-03-17T08:21:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/morgan-stanley-and-now-here-comes-the-selloff-2010-3"},"modified":"2010-03-17T04:21:00","modified_gmt":"2010-03-17T08:21:00","slug":"morgan-stanley-and-now-here-comes-the-selloff","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/438476","title":{"rendered":"Morgan Stanley: And Now Here Comes The Selloff"},"content":{"rendered":"

(This guest post previously appeared at the author’s blog<\/a>)<\/em><\/p>\n

It wasn’t easy to find in this sea of bulls<\/a>, but there is actually a bank out there that is not full-blown bullish following the huge rally of the last month.  Morgan Stanley says investors should prepare for a sell-off in the coming weeks as the market has gotten ahead of itself.  Their equity analysts say the risks have risen in the near-term as sentiment swings wildly positive (see here)<\/a> and risk assets run ahead of themselves.<\/p>\n

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:<\/p>\n

\"chart\"<\/p>\n

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Read more market commentary at The Pragmatic Capitalist ><\/a><\/strong><\/p>\n

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