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According to S&P major banks and MS among them, are not yet out of the wood.
MS shares have been very resistant to any pressure. Sure, they fell from the premature $50 to $43, but not lower.
The market shrugged off most of the warnings on banks, but as bad news for financials become reiterated and then confirmed by facts we could see new lows or bottom price stagnation at best.
I'm contemplating buying MS under $40 and not before another three months, maybe six.
I own both the BAC and MS, but the MS is the one I've really got my eye on. I mean, I wouldn't mind DCA'ing my position on both of them at lower levels, but I'd like to see a 'rounding off' bottoming process, and then buying on a break above the rounding, varying moving averages (I use EMA's as support and resistance)
And in three or four months? We're facing the October rally period.
No, not at all. But after 12 years at this? I've come to learn to enjoy periods of fear. Fear gives us better prices down the road. Fear means I'll get what I want, for a better price. If I had a very rough guess - I'd place us as nearing half way through the financial mess. At least with the big banks.
The recession on the other hand - is a different matter. Markets are usually the first one into a recession, and the first one out of a recession. But I even don't see us 1/4 of the way through this recession yet.
I think it's a good idea to start or add to positions in major banks (C, BAC, MS etc) when stocks are being dumped and fall under your buying price (which must be outrageousely low).
Like that you won't miss the boat if stocks rise unexpectedly and won't loose all your money it they keep on falling.
Think of your cash like amunitions: Always keep some for the tough times.
MS and other banks are attractive now, but as I said, I will stick to my timetable (3 months minumum).
But if I had more cash available and my portfolio hasn't been torpedoed in last 4 sessions (which could push me to buy other things than banks), I may be buying banks moderately at these prices.
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