Vendit, luckily, RMBS has a large short position which is going to serve as a cushion. Frankly, I thought we would get a little support in the $81 to $82 area before we plunge to the $69 support. We went to that support in a straight line, so, yes we could get a small bounce, I doubt it will go above $82 (around $77 to $79 more likely). The more probable scenario is that INTC is going to redraw the roadmap and come up with it fast, that will serve as a second falling shoe to take out the $69 support, IMHO. Right now, I am quite satisfied in standing aside and not trying to catch falling knives. The market in general has breached the April lows and thus should, IMHO go down and at least test the $9800, a general downdraft will not be helpful to RMBS, and a general downdraft will also cause some excessive liquidation by margin calls. So, for the next two to six weeks, it does not look too good. The best scenario I have is a resumption of the decline next week and cleaning of the deck by the first week in October, setting the stage for a year end rally bringing RMBS back above $100 (or my old target of $122). I still have a low of at least $61 before that rosy scenario develops, however.
Zeev |
