Most homebuilders have already corrected upwards of 40% from their highs of this past July. If you are waiting for this to happen in 2006 . . . you've already missed the boat.
no, not waiting...i have been in since september...more or less. 80% of my portafolio right now is short homebuilders. But they are down 40% with the fundamentals of the industry still basically intact...the retacement has been mostly form the expectation that the housing boom cant continue. I think after the poor fundamentals start to come out (recently it is just"softening of demand" and the like) and the backlogs are not honored...it will definantely come off some more. I do believe the bulk of the movement will be in 2006. DHI for example is at $30, down from $42in july. but in early 2003...it was less than $10, in 2000 les than $5. I think the company wil survive, but its sales will be at 1999-2000 levels...and so will the price.
I am bearish as well, but instead of wasting time and mental resources on predictions, I am listening to the market. IMO, the Dow Jones, the Nasdaq Cmposite and the Nasdaq 100 have reached very important areas. How they cope with them during the next days and weeks may set the trend for the coming quarters. The Dow Jones Industrials Average is about to finish a Diamond Pattern in the long term Weekly/Monthly Chart. Just like in 2000/2001. http://www.thestreet.com/comment/chartist/936634.html Nasdaq 100 is testing a relative High @ 1635. So far, resistance was strong. Nasdaq Composite in the Weekly/Monthly Chart is forming a bearish wedge formation. http://stockcharts.com/commentary/archives/cww20051106m.html#section1665 The good thing IMO is that chances are high we'll find out where the markets will go for the next months during the following weeks. To sum up: I'm neither a bull nor a bear. I'm an opinion whore
Refco Seeks Authorization To Put Refco LLC In Ch 7 DOW JONES NEWSWIRES November 9, 2005 5:39 p.m. WASHINGTON -- Refco Inc. (RFXCQ) asked a bankruptcy judge for permission to liquidate its flagship business, saying it wasn't able to complete an auction of its Refco LLC unit. In court papers filed late Wednesday, the company said "the majority of potential bidders" for Refco LLC asked it to organize the sale in a way that would permit the unit's liquidation under Chapter 7 of the U.S. Bankruptcy Code. If a sale of the unit occurs, Refco said, Refco LLC will file voluntary Chapter 7 petition. "As the negotiations continued, it became increasingly clear that the sellers would obtain the maximum value...by invoking the protections afforded under subchapter IV of Chapter 7 of the Bankruptcy Code."
Riskmanager, Thank you for your post. The last two days I have reflected, (and analyzed) my past few weeks, and have concluded that I have become extremely opinionated about the market. As an example, when the market appeared to be turning last spring, my numbers were as follows: March: up $22K April: up $50K May: down $83K This has been my pattern as of late: August: up $44K September: down $8K October: up $22K So far for the month of Nov: Down $28K It's so damn frustrating for me when I feel the market has chosen a direction; later to be smacked in the face. As of late I have slowed my trading, as-well-as, share size. Waiting for another three month head fake.
what type of trading do u do? Intraday scalping.. what time frame? what stocks? how much position size?
The thing is, it is a dull market which means that you can not afford to have strong opinions especially on the short side. Unfortunately there is no clear market trend and unless something terrible happens, I do not foresee any significant crash type move. There is too much liquidity in the global markets. If you look at the charts of the several emerging markets and some industrial countries such as Japan(4 year highs in Nikkei etc), you will see that there is a global uptrend. Probably for the US market, you should focus on the key ES levels, and take it from there whether to stay long or short with a disciplined approach. I trade 100% listed and I enjoy this type of market as sectors and stock groups trend well.
Terrorism, an Asia bust somewhere, or derivatives and attendant credit would be my guess. Usual suspects. I don't agree some of this fellow's history of the 1987 crash but thought the rest of it was interesting. http://www.safehaven.com/showarticle.cfm?id=4045&pv=1 So I say - be bullish, but underleveraged! You'll last longer than dirt that way. Also, don't believe a thing about huge risk being managed or hedged away. The math crowd is in reality at the stage of bloodletting and opening windows in dealing with the l perils they think they've got licked.
Here's my 2c. I wouldn't be surprised if there is a crash. I do not think it will come out of the blue especially when the market is making new highs but it will probably be once we are in a downtrend. The bull is dead, I mean the strong bull. All the easy money that was to be made on the long side has been already made. The dividend yield in S&P 500 is less than 2% whereas yield is 4.63% in the notes. I do not understand why any portfolio manager wants to be long the S&P when you can get a better return with less risk if you buy the notes. The only reason that I can think of is the market had gone up in the last 7 out of 8 years in the 4th quarter so if you want to play the odds better be long or left out. That is not a good enough reason to buy although it is still too early to sell. The market might move much higher. I need to see 1% true selling days in order to be short this market. For now I'll buy in any significant pullback. During 99-00 I always wanted to be part of a bubble and now it sure feels good to let go of all the reasons and run with the crowd.
Sounds like your largest losing months ( May & Nov ) may have been due to holding shorts for too long and missing out on a rally off the lows, in each case. What have you been trading, and under what time frame?