Expert Analysis: JP Morgan/Chase (JPM) a Sell, Sell, Sell

[Post Summary]

His mouth is most sweet, Yes, he is altogether lovely.
—Song of Solomon

* * * * *

In two words, I can describe what the technical picture indicates about the stock of JP Morgan/Chase (NYSE:JPM):

Fools Gold.

It seems every trader and your mama loves this stock. Yet it is leveraged to the teeth with a derivatives portfolio dwarfing Citigroup's (NYSE:C). Odd how most everyone knows this, yet no one questions JPM's performance relative to C. The assumption is JP Morgan/Chase simply is a better run bank.

How is this? Is it a matter of transparency? Yes, when Jamie Dimon lies ("no one could see what was coming with the massive expansion of sub-prime securities"), it's easy to see through it. However, the bank's real secret probably lies in its European connections. Apparently, they've not let go ... yet.




Oh my, look at that volume of shares exchanged. Medic! There's a Limey choking. For what? A bet the firm's leverage can be maintained? Good luck.

As long as JPM's RSI remains on the sell-side (below 50) any rally should be sold.

From an Elliott Wave perspective the common stock of JP Morgan/Chase quite possibly could be hot on the tail of Citigroup. Technically speaking, JPM in all probability is but lagging its peers.

In conclusion, listening to the likes of Cramer and Gartman might be hazardous to your financial health on this one. Caution specifically goes out to those who think JP Morgan/Chase's 6% dividend is safe and sweet. Given today's fragile financial environment, dividend prospects from a highly leveraged firm should be seriously questioned.

—Tom Chechatka