Corepuncher's Account Talk

[Corepuncher]

ATC- Congrats on your great July. Stay tuned for another entry point.


1320, IMO, will be a very tough nut to crack. Like Nutt said, 200 SMA but also a big June tech level and also exactly a 50% retracement from May high to July low!

Personally, if oil continues down tomorrow, and we have a follow through day (even a little) and it looks like we'll close > 1300, I will sell at least 50% of my stock holdings. We may go a bit higher from there, but look at Wed with retail sales and Thur with initial jobless claims...could crash the party. After the end of next week, I still have to wait a full 2 weeks before I can buy more stocks. If we do top next week, that will be about a 20 day (or 4 trading week) run up, and if you think it will drift symmetrically down after that, then there may be a lower buying opportunity in later weeks. If you think 1320 is the high, that is a 120 pt move off of 1200, giving half that back would be 1260 again...which is certainly possible. If we do continue the rocket Monday, there is a chance we have one of those pins shooting maybe 1310-1315, but then settling back down around 1300 which would be a slight reversal signal. Compound that with the Retail, jobs number, and possibility that oil hits a short term bottom, might be a good reason to sell the rally Monday or Tuesday. Sorry for the "run on " paragraph! :toung:

 

[ATCJeff]

ATC- Congrats on your great July. Stay tuned for another entry point.


1320, IMO, will be a very tough nut to crack. Like Nutt said, 200 SMA but also a big June tech level and also exactly a 50% retracement from May high to July low!

Personally, if oil continues down tomorrow, and we have a follow through day (even a little) and it looks like we'll close > 1300, I will sell at least 50% of my stock holdings. We may go a bit higher from there, but look at Wed with retail sales and Thur with initial jobless claims...could crash the party. After the end of next week, I still have to wait a full 2 weeks before I can buy more stocks. If we do top next week, that will be about a 20 day (or 4 trading week) run up, and if you think it will drift symmetrically down after that, then there may be a lower buying opportunity in later weeks. If you think 1320 is the high, that is a 120 pt move off of 1200, giving half that back would be 1260 again...which is certainly possible. If we do continue the rocket Monday, there is a chance we have one of those pins shooting maybe 1310-1315, but then settling back down around 1300 which would be a slight reversal signal. Compound that with the Retail, jobs number, and possibility that oil hits a short term bottom, might be a good reason to sell the rally Monday or Tuesday. Sorry for the "run on " paragraph! :toung:

Thanks, July was fun. August is starting to turn into a pain. I'm starting to think I may have missed the train. But, a small gain is better than a loss.

 

[Corepuncher]

Bookeeping of YTD Stats

Updated Tracker COB 8/08/08
----------------------------------------------------------------------
2008 YTD Return: +7.78%
Today: +2.19%
Current Allocation: 45C 55S
Tracker Rank: 3
Tentative Next Move: Sell > 1300
----------------------------------------------------------------------

 

[Corepuncher]

Selling my 45% C fund holding COB today. Rally may continue into Tuesday but possible downer data on Wed and Thur. Oil can only go down to around 110, IMO. I feel strongly about that. Once oil turns again stocks will go down because the reasons for them being down in the first place have not changed

One thing I was thinking about was how even in bull markets, you tend to get 50% pullbacks of big runs. 1200 to 1320 or 1350 would then pullback to 1260 or 1275...but this ain't a bull market.

 

[RonUSPSretired]

Why sell all the C? Wouldn't it be better to keep a spread between C & S or do you see small stocks cont. to do better?

Selling my 45% C fund holding COB today. Rally may continue into Tuesday but possible downer data on Wed and Thur. Oil can only go down to around 110, IMO. I feel strongly about that. Once oil turns again stocks will go down because the reasons for them being down in the first place have not changed

 

[Corepuncher]

Why sell all the C? Wouldn't it be better to keep a spread between C & S or do you see small stocks cont. to do better?

I wanted to take 40-50% off the table...but S has been outperforming C so I kept it.

 

[Corepuncher]

AGG/F fund looks like a head and shoulders pattern. Actually, it looks like two...with one head on July 11th (shoulder June 30th and July 31st) and another head on July 31st (shoulders 7/24 an d8/7). Either way, it looks head and shouldery! Maybe going down to 98 or 98.5 on F. Something to keep in mind if you like to play the F bounce.

Also...rates are rising. That's not going to help housing.

 

[Steadygain]

Also...rates are rising. That's not going to help housing.

RATES at this point are totally insignificant in the "housing" sense.

Fixed at 5% for years - and there is no way the RATE was 2% when that happened.

The FACTS are: what rates the general huge guys get compared to the average "home buyer" have not matched since I locked in.

If rates continued to coincide with one another then I would have locked in on a 15 year loan at 3% - and paid it off within 5 years.

Rates have to rise as the Markets go up; it is unavoidable; and that more than anything signals strength in the economic outlook.

 

[Corepuncher]

RATES at this point are totally insignificant in the "housing" sense.

"Totally" insignificant? Don't you think that is a little strong?

Seems rather obvious to me...we have a glut of unsold homes, and prices are falling because the homes need to get sold. If rates increase, then the house prices have to fall further in order for people to afford them. This will delay the housing "bottom". Couple rising rates with the fact that banks continue to tighten lending standards.

 

[Corepuncher]

If we do continue the rocket Monday, there is a chance we have one of those pins shooting maybe 1310-1315, but then settling back down around 1300 which would be a slight reversal signal. Compound that with the Retail, jobs number, and possibility that oil hits a short term bottom, might be a good reason to sell the rally Monday or Tuesday. Sorry for the "run on " paragraph! :toung:

So far so good. Shot a pin up to 1313 and oil turned. Toot toot! :cheesy::laugh:

(Intermediate term I still think 110ish is the intermediate term oil bottom)

 

[Steadygain]

]"Totally" insignificant? Don't you think that is a little strong? [/b]

Seem rather obvious to me...we have a glut of unsold homes, and prices are falling because the homes need to get sold. If rates increase, then the house prices have to fall further in order for people to afford them. This will delay the housing "bottom". Couple rising rates with the fact that banks continue to tighten lending standards.

It was "a little too strong".

I'm more venting frustrations than anything else. My point is: if the prime rate is 2% - then housing rates should be way under 5% and even 4%. So I'm merely pointing out they no longer match up.

Also would say the same thing for Oil and Gas Prices. If the Gas Prices matched the falling Oil Prices - we'd be paying about $3.00

The in depth news on the glut of unsold homes showed at least 50% have been distroyed - in retaliation. World news showed a bunch of these places with everything torn out. So it's a much bigger mess than most are aware of.

ANYWAY - YOU ARE RIGHT CP - I STAND CORRECTED.

 

[Buster]

Oh..and CP..I hope you can take some credit for this cool weather and the 4.75" of rain this morning..woot!

 

[luv2read]

See this thread for an explanation of rates vs rates - and the latest "vehicle":

http://www.tsptalk.com/mb/showpost.php?p=175342&postcount=143

RATES at this point are totally insignificant in the "housing" sense.

Fixed at 5% for years - and there is no way the RATE was 2% when that happened.

The FACTS are: what rates the general huge guys get compared to the average "home buyer" have not matched since I locked in.

If rates continued to coincide with one another then I would have locked in on a 15 year loan at 3% - and paid it off within 5 years.

Rates have to rise as the Markets go up; it is unavoidable; and that more than anything signals strength in the economic outlook.

 

[Steadygain]

Thanks L2R - You are the Best of the Best!!

 

[Corepuncher]

Oh..and CP..I hope you can take some credit for this cool weather and the 4.75" of rain this morning..woot!

But of course!

 

[Buster]

Lol..:d:d

 

[Corepuncher]

Issuers hold it
Under the system that contributed to the current credit mess, banks were able to pass on the actual risks of mortgage loans to outside investors. But when issuing covered bonds, banks would be required to hold the mortgage assets on its books. Having to hold the debt gives the issuer a very big incentive to only issue traditional, safer loans to borrowers with a down payment, income and credit history. The rules laid out by the Treasury effectively prohibit the kinds of subprime loans that precipitated the current credit crunch being allowed as collateral for covered bonds.
"With covered bonds, an originator who has to fund mortgages by keeping them on balance sheet has an immediate incentive to originate the highest quality mortgages," said Morgan Stanley analysts led by Michelle Bradley. "The originate-to-distribute model has been severely criticized in the wake of the subprime crisis, as it invokes moral hazard issues."
However, it limits the banks' ability to do what they've done in recent years: leverage the loans - sell off part of the amount, which enabled them to use that money to make more home loans to a wide range of borrowers.
"There will be less capital available in the market to make loans than there was a few years ago," Oppenheimer's Webman said. "But it will be more than now and that would be healthy. It would be a more sustainable kind of market."

Covered bond market size
How big the covered bond market may grow to is a matter of some debate. "It should begin within a year," Corner said. "The Treasury is pushing this and there's a need in the market for a funding alternative. It needs to be sizable enough to do some liquid deals and a large flow of information."
Based on the Treasury's stipulation that caps how much of an issuer's liabilities can be in covered bonds, the market may be no larger than about $340 billion, according to Credit Suisse.
Another way to calculate the potential size, based on the amount of mortgage loans that fit the Treasury's criteria and probable credit scores required by issuers, gets a smaller number. Also taking out the amount of loans already securitized, the maximum market size is around $228 billion, according to Morgan Stanley.
The European covered bond market is more than $3 trillion, and has weathered the financial market turmoil better than unsecured debt, said analysts at Credit Suisse. New bond issuance has remained strong and new issuers in new areas continue to join the market.
"This highlights that in the euro area, covered bonds continue to satisfy the needs of both issuers and investors as mortgage-backed security activity has slowed significantly," strategists led by Ira Jersey said in a research report.

It definitely sounds like a good longer term solution. However, like the article says, it will weed out people who do not qualify with the stiffer standards. I don't think it helps us out right now...people who WOULD qualify for a "covered bond loan" probably already qualify for a loan today.
We had years of very low interest rates. Most smart people saw the opportunity and either bought a house or refinanced. This sent the housing market through the roof...and people did not want it to stop. Once the "good" borrowers dried up, it took "subprime" borrowers to keep the train moving. Now it stops. IMO, interest rates will NOT go back down to recent lows...but that's just a guess. Anyway, I just predict slow going for housing.

America is still in debt. We are used to having everying we want right now, and old habits die hard, therefore I predict a consumer credit meltdown with credit card defaults. No more HOUSE ATM's...everyone has their plasma TV's already and gas prices will stay fairly high. The 1990's were revolutionary with the PC and internet. That was real and people didn't have crazy debt. Now, the most recent bull market was driven by housing and low interest rates. We ate up all that free money and now nothing can save us except time...time to pay off debt and time to save money. That's my take and why I'm generally bearish.

 

[Steadygain]

We had years of very low interest rates. Most smart people saw the opportunity and either bought a house or refinanced. This sent the housing market through the roof...

Sorry, but please know I bought the house at 8.128% - 30 years Fixed Rate...

Was able to refinance for 15 years Fixed for the same payment

Then was able to refinance for hundreds less...but kept the payments the same.

The house has more than doubled - will likely sell for at least 4 times what I paid for it, and it's the only debt I've got (other than the kids' college education). So to not take advantage of these opportunities would have been throwing $1,000s down the drain.

 

[Corepuncher]

Sorry, but please know I bought the house at 8.128% - 30 years Fixed Rate...

Was able to refinance for 15 years Fixed for the same payment

Then was able to refinance for hundreds less...but kept the payments the same.

The house has more than doubled - will likely sell for at least 4 times what I paid for it, and it's the only debt I've got (other than the kids' college education). So to not take advantage of these opportunities would have been throwing $1,000s down the drain.

Sounds like you got a great refi rate. I'm just saying the chance that rates will go low enough for you to refi again are fairly low.

 

[Steadygain]

Sounds like you got a great refi rate. I'm just saying the chance that rates will go low enough for you to refi again are fairly low.

I totally agree my friend - that's why I was so outraged and came on so strong initially. It just burns me - that they can reduce the rate to 2% and not make a similar cut for the average person. It's not that I feel a lot for the ones who did not think things through to begin with. I honestly believe many need to learn from their mistakes and not expect the taxpayers and government to bail them out. But many more - who do think things through - and are trying to buy a house during a very difficult period - these are the ones who should be getting these super rate deals AS IT IS THE ONES WHO HAVE MONEY AND ARE PRODUCTIVE CITIZENS THAT WILL SPUR THE ECONOMY.