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Remember what happened back on February 20th? Yes, you’re right, the highest prices for equities in the history of the world. But something else, too: it was the day that the geniuses at Morgan Stanley paid a huge premium to purchase what is agreeably one of the lamest online brokers ever, E*Trade:
This is just a sampling of the kind of damage done recently. I have gathered up some charts into specific sectors.
There is lots of “air” below Monday’s closing price of 22.81, as shown on the monthly chart below of the U.S. Financial Sector (XLF).
Major support lies at 20.00, while major resistance (formerly support) is now 23.50.
The entirety of the premium Morgan Stanley paid for E-Trade has been destroyed. They sure top-ticked the market on this one. Serves them right for pandering to that creepy spokes-baby.
If I may pat myself on the back, my identification of the trendline touch for KBE was spot-on. Score 1 point for the pure bearish spirit, and negative 1 for the hideous ogre Abby Joseph Cohen, the Medusa of the modern age.
One of the most vulnerable sectors in this goes-up-every-market is, I believe, the banks. Earlier today, I shorted KBE, with a stop at 46.35; it is already showing a modest profit.
