Monday, May 17, 2010

Morgan Stanley - Out of Here?

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Just a philosophical thought, as this is no ordinary secular stock bear market. We have to correct the excesses of the greatest bull market in U.S. history, which requires a correspondingly severe bear market. Don't believe me? Ask a "buy and hold forever" Japan stock investor how it's all going to turn out, now that they are mired in their 20th year of secular stock bear market.

More companies will be leaving the American landscape before this is over, whether you think it is rude to point this out or not and whether you want it to happen or not. I was looking at the Morgan Stanley (ticker: MS) chart, wondering if they were going to survive. They don't seem to have the same strong political connections as JP Whore-gan or Goldmun Sucks. Here's an 18 month linear scale weekly candlestick chart of the price action in this stock thru Friday's close:

And here's a 17 year log-sale monthly candlestick chart of MS with thoughts of a currently black bile bearish mind:

I have no position, just talking smack. Oil is a chart that could also be in trouble if we are headed for another "deflationary impulse":

By the way, for those expecting a long, drawn out topping process here, maybe we'll get it. But once frank interventionism and hot money flows leave the casino or fail to have an effect any more, things can turn quickly and my recent posts have highlighted many warning signs that are worth paying attention to. For your chart porn pleasure (or disgust), here's a chart stolen from Daneric showing what happened at the top of the 1930 spring rally out of the 1929 crash:

I am not saying it's the 1930s - far from it. I remain bearish and I am still talking my book.

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