Still short on CFC?

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BLUE FIRE_IHB

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Are people here still short on CFC?

Obviously its had a huge run up in the last 2 weeks, so what is the consensus on how short lived is this run up is likely to be?
 
In a short-covering rally, prices go up until the last people who are short capitulate and get out. if you are still short, the market is waiting on you to get out before it goes back down.

I know that answer sounds rather glib, but there is a truth in it that every trader knows...
 
Well my September $10 strike puts will probably expire worthless but last week the $12.50 strike puts were trading at $.50. So I wrote a put to cover my losses and I don't think they will get close to there by Friday. I still have my October $10 strike puts and I will see how it goes. I think there will be some more volatility with them between now and the expiration date to take advantage of. Today as usual the put volume was higher than the call volume and the open interest for the puts is huge compared to the calls. It's tempting to write a $22.50 strike price call at $.75. All the technicals show that the stock price should drop in the next few days. It's above the 20 day moving average, the stochastic is showing overbought and went into a negative crossover today.

As for shorting today the short interest was almost 16% of the float. This is a 63% increase from yesterday.

Disclosure: Anything you read from me that has to do with investing is not to be considered investment advice. If you choose to invest you are doing so on your own will and accept full responsibility for the risk that you are taking. That risk could mean losing not only all of your investment but possibly more. I and IHB will not be liable for any losses you may experience.
 
I shorted CTX @ 33.xx. They lost $128MM in the most recent quarter and I don't see them becoming profitable for a good while.
 
First time post (this blog is great).

I recently came across this family of ETFs (http://www.proshares.com/funds) that allow you to "short" certain sectors (incl. financial and real estate). It seems a bit safer than real shorting. Does anyone know if there are any caveats to these funds? The relatively low trading volume of these ETFs makes me wonder if they're liquid enough, but maybe I'm just being paranoid. I'm not a financial expert and I hope this doesn't come across as a pump-and-dump posting (esp. since this is my first post) :).

Disclaimer: I'm considering buying these in the near future or may have bought them by the time you read this. And, this isn't investment advice either, so I'm not liable for any losses you may experience.
 
warheadwl,

I have bought and sold the proshares ultrashort real estate ETF. They are not very liquid, but that isn't a problem for a small investor. They do have large bid/ask spreads which is a problem. You take a hit if you buy or sell at the market.
 
IR - My experience with SRS is that it is so volatile, I could not possibly be concerned with the bid/ask spread. I am not knowledgable enough to understand any liquidity problems associated with SRS. My orders went through just like a big cap stock ... Quickly. I have a buy order in right now at 86.20, but doubt it will execute.
 
I dislike trading any security with a big bid/ask spread. When the thing has to move a quarter or more just to get me back to even, I shudder.

I rarely buy or sell with market orders, but if my stop is hit, these securities with the big spreads usually cause a lot of slippage.
 
Well, as a trade, I mentioned shorting HOV $1 ago, anyway, I'm planning to short any uptick, until it becomes a flatliner.
 
I'd say on HOV wait until after Friday to make any moves. There was alot of trading on the October puts especially on the $7.50 strike price. What is interesting is the open interest on the January $10 strike puts. Keep in mind their fiscal year is funky and their year end is October but they won't release their numbers until December. Personally I wouldn't touch until after Friday or if it has a big uptick of a $1 or more.
 
On the other side I think DHI will be a survivor of this housing downturn and it could be a good long term investment, buying small chunks and dollar averaging to start building a good position, (for your kids), it will be a loser in your portfolio for a while but currently is trading below book value.
 
I just noticed something I have never seen and I doubt I didn't notice it before but CFC has a $475mil MBS pool named Countrywide MBS Reperforming 2005-R3. It is a private deal so unless you are an owner/bagholder you can see it. But supposedly it closed in 9/2005 and the last update was 9/17/07. So it seems that they have created an entirely seperate pool for the non-performing loans that they cleaned up and are performing again. It really sucks that it is private and I can get the prospectus or see how well er badly it is performing.

Anyway I checked 16 of their 2006 option ARM deals and they have $471mil in foreclosure, bk or REO. The 30 day and 60 day deliquencies averaged about 8% of the pool balances and there is a consistent increase every month.
 
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