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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (196109)	4/13/2009 2:02:10 PM
From: Think4Yourself	Respond to of 306849

Today really isn't surprising to me. The rules of the game have changed quite a bit in the last few weeks, and the market is in the process of adjusting to the new reality. We could rally for weeks on the short covering alone, especially since nobody believes we have seen the bottom. Then there is the 401-K/IRA money coming in, and the money on the sidelines. Pavlov's dogs are currently trained to short all rallies.

To: patron_anejo_por_favor who wrote (196109)	4/13/2009 2:32:36 PM
From: Perspective	Read Replies (2) \| Respond to of 306849

I'm ready for the lobotomy. Jesu, I can't believe the number of stocks trading at the same levels they were at twelve months ago. My brain is about to short-circuit. I know it's just short-covering. I know it's probably traceable to the $12B that went into Goldman Sachs' hands. But you'd think other parties in the market would maintain some rational behavior. Do people think that all these companies teetering on the brink of BK are going to suddenly avoid it thanks to the economy decline slowing to a more sustainable descent? Seriously - we've still got hundreds of banks that are insolvent that will go into receivership, stock market bounce or no. I know, I probably just have to withstand a few more weeks, but my money management rules are forcing me to cover a few shorts that were tooearly. Man, I hate that. And I've covered shorts in banks that will probably have a date with Shelia before the year is out. They can't possibly recover. But with the silliness in BKX, I have to do it to reduce risk. It's taken a long time to establish these positions; I hope the shares will be available to borrow next month. `BC

To: patron_anejo_por_favor who wrote (196109)	4/13/2009 4:21:29 PM
From: Perspective	Read Replies (2) \| Respond to of 306849

This past two weeks has been a pain in the neck. My strategy has evolved to establishing a diverse short portfolio, and then attempting to hedge varying amounts of it depending upon general market trends. It generates enough trading activity already; I can't imagine trying to modulate all my individual positions all the time to deal with market turns. So even though the market hasn't rallied that much off the March 30th low, I've lost a bunch because the shorts I've tried to maintain really outperformed the market these past couple of weeks. Ouch. My rationale has been to hedge with very broad-based tools, like SPY or QQQQ, and count on the fact that my sector selection will be a net positive for me over the long haul. Well, being short anything REIT or financial the past couple weeks has been a really bad idea. And unfortunately, the energy exposure within my hedges really hasn't kicked in nearly what I thought it would. So far, they seem to be lagging. I'm reluctant to do too much right now, since the ending diagonal in SPX/COMPQ looks pretty convincing. Put/call continues to sink, completely consistent with the notion that all the activity off the November low is corrective. Volumes continue to wane, and the rally hasn't shown any selectivity or new leadership - it's all the low quality trash that's running. People refer to the rampant bearishness. Sure, that's a necessary condition for a bottom - people will be overwhelmingly bearish when we finally hit bottom. But they will probably be bearish for a long, long time before pricing bottoms out. This reminds me so much of last year at this time. After months of short covering, it was extremely hard to hold the long-term course. Here we are again, only this time, the correction is 21 weeks old in a lot of places. I had figured 8-12 weeks, back in November. We're almost 2X that. I'm gettin' kinda tired. Wish I'd followed my inclination to COMPLETELY close everything at year-end and just take Q1 off! If this IS just another short-covering rally, it's going to go down in history as one of the biggest fakeouts of all time. The market sure is good at delivering the unexpected. `BC