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Hickey and Walters (Bespoke) submit: European equities are down moderately Wednesday, and at least part of these declines can be attributed to a research report from Morgan Stanley strategist Teun Draaisma. Mr. Draaisma contends that European equities are currently set up for a major correction in what they term a 'full house' sell signal. The analyst contends that these signals are relatively rare as there have only been five other signals since 1980 with the last such signal occurring in early 2000.

Looking back over that time period, we found that Mr.Draaisma's calls were consistent with his indicators as he did in fact turn bearish on the market during that time frame. Even after a four percent decline in the market in March 2000, he still saw further downside ahead.

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