Tuesday, October 02, 2007


Sector Spotlight: Homies

This one hurts. You are witnessing the unraveling of the bears, via covering their homebuilder, financial, retail and airline shorts.

Most of the important sectors are down, such as industrial, oil, chemical, defense and semiconductors. In other words, the people who were betting on recession, via short financials, homies and retail, are running for their lives--as if a rabid Tasmanian devil were chasing them.

In a way, it's sad, but mainly funny.

With the market at new highs, the short covering can continue, indefinitely.

Also, it's worth noting, we are seeing a major bump in natural gas prices. While "The Fly" likes higher natty, since he is long UNG, it may hurt other sectors, especially chemical related stocks.

Should natty continue to melt up, look for stocks like TNH, LZ and DD melt away.

Finally, I'm not a fucking fan of the homies. I'm not buying them. However, I do own a schlocky land development company, AXR. If the homebuilder squeeze continues, AXR will print $35-40, effectively killing its super sized short position.

great stuff. IMMR tearing the last remaining shred of dignity out of the fucking shorts today.
Anyone else considering a homebuilder trade?

How about this as a squeeze play... 78% of DSL's float is sold short.

I know you hate it but I will have you know I am up 27% now on EMC. I think it will continue to 23-25 where I would sell it 7 ways. SAN's are on fire no doubt and I am using VMWare right now actually as I type.
If ever you have doubts about AXR, just remember their motto:

The leads are not shit, YOU are shit!
well the homebuilders just moved about 10% in the last few days, not sure if I'd wanna jump in right now
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