Top of the Curve

Really quite fascinating

Just back from the Rangers game - had a few beers and ready to rant.

The housing market is the most intersting thing to me. Housing stocks have had a nice little bounce lately and I dont think that came at much of a shock. I personally (and surprisingly) cant wait to short them again. This also leads me to the bad news=but stocks point I made in earlier posts. DHI said YoY avg sales px was down 9.8% AND!!!! unit sales were down 25%. Thats MUCH lower sales at MUCH lower prices! Stock - wait for it - stock traded up!!!! over a buck! what the fu___! Oh I see...news not as bad as expected. Then, another great company KBH said they had some stock option issues and would have to restate. Well, thats good news. Stock up over a buck as well. Oh yeah and the JP analyst upped DHI to overweight. This was after he said buy the stock at 40 and changed that to a neutral at 24. What a dick.

Next topic - one that really feels nice. My personal account or "PA" as we say in the buiz...cmon thats a joke. Well its really called PA. Anyway, Im down like 25% in the last couple weeks waiting for the market to drop. Now, with my job I have a 30 day holding period but still - I am fighting the market and I know it. Of all my positions the only one in green is LUV puts, and I dont really know why its down. And I was thinking - yeah this friggin hurts. Not so much the money as being wrong. I know the market will probably flow up a bit here and given a shorter holding period I would try and trade that. Still, fundamentally I think things havent changed. This economy is built on a liquidity bubble. Housing, Private equity, everything. I mean 1.6 bn for You Tube? Seriously...I mean...I understand the number of visitors that site has but 1.6bn? But who am I to question - people around the desk said that was cheap. I dont know how or why I just no there wasnt much competition at that price.

Back to the fundamentals of (what I think) this market is based. And that is tons of cash lying around. I think thats going to change and what is propping the market up is a shift to quality. Out of emerging markets, energy and speculative bets and into large cap. If this is the case then this upward market will roll over. Of course, I have been thinking that since SP 1300.

posted by BKo @ 7:31 PM