OT UAL: Shorting airlines, especially the high-debt names like UAL, is an excellent hedge for energy positions. If oil goes up, airlines go down, since fuel is a big cost for them. The only reason oil goes down a lot, is if we have a double-dip recession, and that means fewer people flying, which also sinks airline stocks. Also, if interest rates go up, or if the junk bond spread widens, this also hurts airlines. It's hard to construct a realistic scenario in which airline stocks go up from here.
Airline index (charts will update): Since bottoming on August 8, XAL has been in a rising channel (bear flag), which has now brought it up to the 50dma. That Nov. 2010 high at $50.66 was a multi-year high. Since then, we've set a series of lower highs, and lower lows. The rally since August 8, looks to me like a bear market rally. At most, it goes up to the 200dma at $42, but it could also fail right here. If it stalls here, I'll short more. If it gets above the 50dma, I'll wait till it stalls (MACD crossover, stochastics below 50), or gets up to the 200dma.
I started shorting UAL again yesterday, at $20.43. I'll short more just below the 200dma, at $22.80.
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