As Countrywide(CFC) continues to implode, my account balance has grown steadily. I was tempted to scale in some more shorts on CFC, but couldn’t find an entry point that suited me.
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This stock market is so sick. I don’t see any reason to buy it at this time. In fact, we could easily see another 25% decline in equities. This talkabout recession is worth another 1500 points off the DJIA. I feel sorry for those who didn’t have the foresight to put their 401-K’s into the money market instead of equities.
My trading account was up $166,989 and my equities account went down $11.5 K. My hedging strategy has held up very well.
I moved all my stops.
I like being 100% right for a change.
Yeah, the market does look sick, and we’re nowhere near any kind of capitulation. So you’re probably right about more declines, but I still think a rally could suddenly come out of nowhere - t’is the nature of the beast. When it does, I’ll shift my mix to more neutral than so aggressively long (using short ETFs).
The money flow story on the financials is interesting. CFC is flattish, but Washington Mutual is in steady un-relenting decline. This could be the next “surprise” blow-up. The news on it WM has been very quiet lately. Citibank’s money flow also sucks, but Bank of America and even little Thornburg Mortgage (one I own) is rising steadily. ING is also rising.
Have a look at WaMu if you’re interested in pressing your financials short position.
Something that I anticipated a while ago is now happening. The Chinese are starting to buy up our shit with our (yours actually)
devalued dollar. They bought into Black Rock (to learn how to do it) and now I hear they have a chunk of Bear Stearns. This is a great opportunity for them. With things so tough, nobody’s going to bitch about it. Next thing you know our financials are going to have a few more strings pulling on them - from Beijing. Interesting times indeed.
Cheers,
George
Comment by George Parkanyi — November 27, 2007 @ 6:06 pm
George,
WaMu (WM)’s chart looks like a pretty sick puppy. I noticed a spike in volume, and attribute a lot of it to
people getting short. In fact, people have to stand in line to short this stock….It came to my attention that there’s not a lot of stock out there to borrow to sell short….unlike CFC. The puts look rather expensive, so this stock is probably going to take some more of a hit.
I’ve never liked WaMu anyways. It’s on my radar screen, but I’ll have to wait and see. If it closed below $16, I would definitely short WM in weak market conditions.
Jeff
Comment by masteroftheuniverse — November 28, 2007 @ 1:04 am