Merrill’s Bernstein: Stay Out of Stock Market; Related: MER, XLF, ^GSPC, ^DJI

Nov.06, 2008 in Investment Opinions

Posted Nov 06, 2008 12:30pm EST by Henry Blodget in Investing, Recession, Banking

From ClusterStock.com, Nov. 6, 2008:

Merrill’s excellent strategist, Richard Bernstein, has news for those who think the market has bottomed: It hasn’t.

You’re all waaaaaay too eager to buy the dip, Rich says, and your bullishness is a decidedly bearish indicator. Contrary to popular wisdown, it’s also better to be late than early:

Our indicators are improving as a result of the equity market’s downdraft, but they are not yet giving an “all clear” signal.

We have previously said that we would follow four main indicators to gauge our re-entry point back into the equity markets. They are sentiment, valuation, estimate revisions, and jobless claims. Let’s review where these indicators now stand.

Much to our shock, sentiment actually deteriorated slightly rather than improved last month [translation: investors got more optimistic]. Our model is picking up that investors are willing to “buy on the dip”. Historically, significant market bottoms have not been associated with such bullishness.

http://finance.yahoo.com/tech-ticker/article/123267/Merrills-Bernstein:-Stay-Out-of-Stock-Market

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