The last thing any shareholder needs is to make the wrong snap judgment during a key moment. To avoid this, many people rely on market indicators to guide them on these matters. One such indication sprang up recently and is gaining no-shortage of attention from strategists.
A prominent stock market indicator is now signaling that it is time to sell. The same indicator had raised a signal to buy in March this year. This change is significant because the last indication to sell occurred in January 2018.
Morgan Stanley’s sentiment gauge, known as the combined market timing indicator (CMTI) made the flip recently. This indicator is affected by many different factors such as equity valuations, risk, and fundamentals.
The shift occurred near the beginning of March and stayed in this territory for fourteen weeks. The move was marked by the Dow Jones Industrial Average and S&P 500 climbing back up following their slump in March.
Experts believe the “sell” status occurred due to mutual funds becoming less negative and better-earning revisions. The upward trend in global markets is forecasted to be nearing a cap. This “sell” indicator may have a significant impact on markets, as European stocks typically fall following the appearance of a “sell” signal.
Morgan Stanely recently pointed out that the U.S dollar is at its most oversold level in over four decades. Following the observation, the company’s strategists changed their existing dollar-bearish stance to a more tactically neutral one.
We don’t know how long this current trend will last. However, plenty of investors are using this opportunity to sell their stocks.