MS outlook - market wrap-up

Morgan Stanley on its way to single digit, lower highs followed by lower lows dynamic still on. We need at least 2 weekly closes below 10 to get a bottom at this stage but, in case of MS, I rather recommend to cover shorts only on that levels and to short any rally thereafter, as the monthly chart gives me the same chills the LEH chart once gave me. As all Hedge Funds lose money - what can we expect from Morgan Stanley who must be suffering in every area of their business as all investment banks? The difference is that GS still gets client business and MS may have recouped some trust from clients after the Japanese investor stepped in with the US Government but the clients are in distress themselves. MS is still quite hesitant about lay offs and to carry forward the expensive man-power might be dangerous as things will rather get worse for Wall Street going forward.

Extremely low volume again as the market declines, but I think we have to get used to that new paradigm which is high volatility and low volume. We are now clearly heading for the lows as we have some indicators in middle level turning south, which is the classic bearish divergence pattern building. Some sentiment indicators even reached clearly sell levels as the Rydex Nova / Ursa.