The fact FRE and FNM cannot stabilize in a bullish tape is very bad news. More troubling is the fact FRE and FNM broke that magical price of $5.00/share, and we feel the talking heads will begin addressing hedge fund dislocations caused by being forced to deleverage their portfolios.
Please understand that hedge funds use individual issues to leverage from, and FRE and FNM looked okay just days ago, agree? So when you see bad stocks move up and or good stocks move down, that is typically a result of hedge funds being forced to liquidate positions they still feel strongly about, yet cannot afford to hold as the margin clerk rings, therefore the term dislocation.
We look forward to sending out a detailed "Psychology of the Upcoming Week's Earnings and Economic Data" Saturday. Until then, we wish you a fun, safe, and happy weekend. We are working very hard to bring you ideas that will educate you in market mechanics, and enable you to profit consistently.
Best to all, the Psychology of the Call team.
Friday, August 22, 2008
Scrathin' & Sniffin' Freddie and Fannie, Yuck
The fact FRE and FNM cannot stabilize in a bullish tape is very bad news. More troubling is the fact FRE and FNM broke that magical price of $5.00/share, and we feel the talking heads will begin addressing hedge fund dislocations caused by being forced to deleverage their portfolios.
Please understand that hedge funds use individual issues to leverage from, and FRE and FNM looked okay just days ago, agree? So when you see bad stocks move up and or good stocks move down, that is typically a result of hedge funds being forced to liquidate positions they still feel strongly about, yet cannot afford to hold as the margin clerk rings, therefore the term dislocation.
We look forward to sending out a detailed "Psychology of the Upcoming Week's Earnings and Economic Data" Saturday. Until then, we wish you a fun, safe, and happy weekend. We are working very hard to bring you ideas that will educate you in market mechanics, and enable you to profit consistently.
Best to all, the Psychology of the Call team.
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1 comment:
I agree, but you failed to mention the Warren Buffet bounce. The oil trade was suspicious/dislocated, no doubt. Kudos from sunny San Diego.
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