Tuesday, October 02, 2007
Sector Spotlight: Homies
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.
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