Morgan Stanley, The End of an Era in Banking or a New Beginning?
The "Too Big To Fail" Bank Morgan Stanley appears to be nearing an intermediate top. Since this bank is TBTF, and is likely to get a government bailout if it ever started to collapse, I think that Bankruptcy is very unlikely, however, It does appear that we are at the start of a downtrend which could continue for at least a year. The most likely scenario is that this is the start of Wave C of a flat which is part of a larger complex correction beginning at the peak in 2000. The alternative possibility is that the peak in 2007 was actually the end of significant Elliott Wave pattern and that we just completed Wave b or 2, this possibility would mean that $MS is going to end up falling into single digits and possibly face bankruptcy or being broken up by the government. Since that is very unlikely I am leaving it as only an alternative count, with the primary count being the Complex Double Flat, ending with either a C-failure or irregular flat.
Either way, this chart would spell extreme weakness for Morgan Stanley in the next couple of years and many other Investment banking companies may follow. This seems to be inline with the projected slowing of economic growth due to the raising of interests rates by the FED. After this final bearish period we are likely to begin another major cycle of growth so long as Morgan Stanley is still around, however, we most likely will not break above the old high of 92 during that cycle due to the implications of a complex double flat pattern. we are likely to peak out around 77 if the double flat ends up being correct. This of course won't happen until a few years.after we finally bottom out.
Other big bearish indications to note on this chart is the support turned resistance zone, the bearish Gartley Harmonic , and the Bearish Head and shoulders pattern (still unconfirmed), Channel break-down, Crossing under the long-term SMMA, and momentum divergences on many different long-term timeframes.
Either way, this chart would spell extreme weakness for Morgan Stanley in the next couple of years and many other Investment banking companies may follow. This seems to be inline with the projected slowing of economic growth due to the raising of interests rates by the FED. After this final bearish period we are likely to begin another major cycle of growth so long as Morgan Stanley is still around, however, we most likely will not break above the old high of 92 during that cycle due to the implications of a complex double flat pattern. we are likely to peak out around 77 if the double flat ends up being correct. This of course won't happen until a few years.after we finally bottom out.
Other big bearish indications to note on this chart is the support turned resistance zone, the bearish Gartley Harmonic , and the Bearish Head and shoulders pattern (still unconfirmed), Channel break-down, Crossing under the long-term SMMA, and momentum divergences on many different long-term timeframes.
Now there is a perfect bat appearing on the daily timeframe which incorporates all the required fibonacci price levels, ie. the 0.886 XA retracement, the 2.0BC=CD projection and the 1.27AB=CD projection. This provides us with a strong harmonic resistance level. Also note that there is an activated weekly 1st wiseman.
There's a small chance that we go up to test the 1.618AB=CD level but that is probably unlikely and it may be a great time to buy aggressive long-term put options. Many other banks are also producing harmonic and wiseman signals at this time too. It would be prudent to slowly add on to your position as more wisemen get confirmed.
I would consider reversing if the wisemen and the PRZ get violated.
With a trump election likely on the horizon the banks could go into full panic mode and stocks could plummet to new lows. Many of these banks are also bloated by fraud and other risky strategies that are slowly being revealed and even the establishment politicians are starting to go after banks, including treasury secretaries that are banning banks from operating in their respective states. A Trump-appointed treasury secretary could ban banks from operating nationally which would absolutely destroy their earnings and allow smaller banks to pop up, essentially forcing a break up of big banks. Also if he reinstates glass-steagal that takes a large amount of liquidity away from the banks investment activities which could severely harm earnings as well.
Many of these institutions will likely be allowed to fail soon.