8 replies to this topic

[hedgehawk]

The financial stocks are getting taken to the wood shed. Stocks like ABK, CFC, WM, and C to name a few. All of these stocks are at multi year lows. Does anyone have a feel for a bottom on these stocks or perhaps have experience to share the last time these stocks bottomed in the last business cycle. Fear seems to be rampant in these stocks which has got me interested. I am considering a DIV + Covered Call Strategy. But the last thing I want to do is to be early.........at any rate am I just completely crazy when I say these companies should weather the storm?

[ogm]

I'm short ABK and MBI, and I wouldn't even try to pick a bottom on them, possible zeros. I posted on my blog a few days ago.
http://www.traders-t...;showentry=1976

For example MBI has only 3 bil in assets and has written 900 bil in guarantees against all that CDO, MBS garbage.

Both ABK and MBI posted big losses and the stocks went into freefall. Avoid any temptation to pick a bottom there.

Edited by ogm, 02 November 2007 - 07:55 PM.

[eminimee]

As long as the oct 05 low holds...I think bkx can get a good bounce at the very least...same with xbd.

http://stockcharts.c...p...01150&r=520

[hedgehawk]

I'm short ABK and MBI, and I wouldn't even try to pick a bottom on them, possible zeros. I posted on my blog a few days ago.
http://www.traders-t...;showentry=1976

For example MBI has only 3 bil in assets and has written 900 bil in guarantees against all that CDO, MBS garbage.

Both ABK and MBI posted big losses and the stocks went into freefall. Avoid any temptation to pick a bottom there.

Got it.......... Thanks.

[ogm]

I wouldn't mess around with this.... This is bad.. very bad.

[hiker]

hi hh..how are you? I like a multi-year fibonacci retrace better than many other TA ideas, so today's low in C and MER represents the approx .618 retrace of the move from the 2002 low to the swing high...and both bounced nicely from there...wonder why? MER low also lines up with an horizontal of interest on the long-term monthly. As legendary stock picker Bill Miller of Legg Mason was quoted saying today - the financial sector we are all so panicked about now is going to be a good performer when looking back 5 years from now. I shorted MER on FOMC day for a swing. I bought both C and MER today. Today's intraday move took MER price briefly below the 100month ema near $57 at the time, but closed the day above that ema. both MER and C had significant price moves in after hours on late session news. a note to OGM..sometimes what looks bad accounts for the absence of buyers that makes it possible to buy a stock at wholesale. there is not perfect bottom picking as we all know, so risk tolerance and trade timeframe is applicable here as always. good weekend all.

Edited by hiker, 02 November 2007 - 10:33 PM.

[ogm]

Certainly huge volume in MER today on that report that they were hiding stuff off their books in hedge funds. And you may have picked a bottom. And Bill Miller may be right. But I do know that sometimes things are cheap for a reason. And sometimes stocks that break down long term supports on huge volume also do that for a reason. I know nothing about Fibonacci retracements, but I'm not going to argue with my own TA here. Guilty until proven innocent. Momentum in the sector is strongly down on long term charts, thats all I know. This stuff may take years to recover. Plenty of other opportunities in the market to waste time there and see if they hidden something else off their books or this is it. This may be the bottom there, may be not. One thing for sure, they aren't going up in any meaningfull way any time soon.

Edited by ogm, 02 November 2007 - 10:52 PM.

[ogm]

Couple charts. Take a look at PFE or WMT for example, and now on BKX and C.
Things don't need to crash or go into freefall. But with a momentum setup like that this can be dead money for years, slowly grinding down in Chineese water torture downtrends. I think Bill Miller will have to wait for many years for all this stuff to "outperform".

Edited by ogm, 02 November 2007 - 11:23 PM.

[ogm]

Btw, I expect the similar chart from GOOG and AAPL when momentum on their monthly charts finaly runs out. No crash, just a WMT/PFE style Chineese water torture, where every dip is bought in hope, and the stock is doing nothing for years.

Edited by ogm, 02 November 2007 - 11:42 PM.