Draaisma: “The Bear Market Rally is Over”

Is Morgan Stanley’s equity strategist just unimpressed with the Bank of England’s efforts at a rescue package?

The second half of the bear market rally turned out to be rather shortlived, and Teun Draaisma is calling the top...

So the bank’s valuation indicator is saying its time to take profits, while its market timing indicator suggests that the rally has come to an end.

Sentiment has recovered somewhat. And of course, the authorities have made their drastic plays to avert the “financial end of the world.” But that still leaves us facing a big earnings recession, adds Draaisma.

Stand by then for “directionless but volatile markets until/when earnings trough and no new bull market till earnings rise again, possibly starting in 1H09.”