Yesterday’s big rally was good for the index longs that Imentioned a while ago, but not so good for the individual shorts that I’ve been putting on.
The bond has been strong, so long term rates have declined and this has not helped the financial shorts, because they have generally gone up based on the perception that lower rates are good for them. However, I’m short these stocks anticipating a wave of defaults in housing and consumer credit, as well as reduced income from house financing. This hasn’t changed so I’m staying the course. Besides, the lowered rates have been good for my fixed income portfolio. This is FNM, COF, CFC and MTG.
The technology shorts have been mixed. Motorola had much stronger revenues and earnings than I expected. CDWC also did well, I’m not sure how, the report muttered about service contracts. I suspect some jiggery-pokery with the numbers, but that’s life in tech stocks. Anyway, I’m looking for a good spot to trade out of these. SNDK is working well, LRCX and INTC also. FSL reports tonight, I’m nervous about that because MOT is a big customer. TXN got a boost from the MOT numbers, but then sank back. Reports next week. Anyway, we’ll see.
P.S. FSL did indeed report strong numbers after the close and is up a little. But COF threw up a hairball and is off $4 at the moment. No volume though, so who knows what will happen in the morning.
Financial Reality 