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Markets take a hard hit this week

08.06.07

Last week we pointed out multiple warning signs coming from sentiment and smart money indicators in the US, and the question was whether or not the S&P 500 index would breach its intra-day all time high.

It did not, and cautious comments by Fed Chairman Ben Bernanke about the housing market together with a rise in Eurozone interest rates and higher US input costs were blamed for a big fall in markets on Wednesday. In addition, there was a bearish note from Morgan Stanley advising clients to slash exposure to shares after three key warning indicators began flashing a “Full House" sell signal for the first time since the year 2000. They added that this triple warning had only been triggered five times since 1980.

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