For now just think the XLF and IYR are synonymous. I can only express the 'hold up' as it relates to swing trader (options for the most part, where time/entry is important) or otherwise looking for a "spot" to take a stab. Furthermore, I will base this argument using the HE (Human Element) and why it feels "trappy". You could easily dismiss the HE (most do) and be my guest, just don't whine if the IYR goes to 35 and your puts move off-balance sheet until you and Black-Scholes work out your differences. If things turn down here (and it just might after today's market action into OB) I stand ready. But I'd much rather get in when someone else gets squeezed out [which has been happening the last few days in case you haven't noticed]. Nope, not a bullish call whatsoever. I just have to consider:
- First off this is not a ticking time bomb. It has long tic'd it's last toc (been in motion a while).
- The [bear] market is known to deliver max pain in each direction.
- A general bias in the market is to go up
- Green Shroom hallucination
- You probably hear "CRE Time Bomb" at the local VFW Post #42.
- They need to raise several factors more in capital.
- Earnings season
- The [fraudulent] maneuverability for earnings.
- The debt holders of the CRE are small banks and large banks alike.
- Underwriters of the offerings are banks.
- Bernanke/Geithner
- HB&B(and oil) underwriter who we all have grown to love: Goldman (pronounced like the Seinfeld, 'Newman'), JPM, etc...
- SRS-flipping-Stocktwits
I've said this in the past...When the bulk of the market comes to expect something, it usually does not happen until it has destroyed the confidence on both sides of the fence.
CRE will go "tee-totally-bust", but if you are here to SRS/IYR for the next week or two just be extremely careful. I've been a SPG/CRE bear since March 2008 and it learned me a time or two before I got dialed in and started p0wning (in one such case). Oft overlooked element #2: Time (not theta, but relating to how things evolve in the market). We know about their fundamentals. We know it's now on everyone's radar. We know everyone has positioned themself short the entire market (or trying/wanting to). We know that there is nothing positive on the horizon (I couldn't care less what NBER gets around to doing). Just know that the weeks of 90 degree market movement are more than likely over because the market lives on hope and clark w. griswalds. Expect all news flows and disruptions in the force to be very closely monitored/guarded. Lastly, expect the unexpected but don't live by it.
Finally, one might come to the conclusion that I'm just a paranoid tard trader (is there such a thing as investor anymore?) because I refuse to only focus on "charts and fundies" and just looking for the next conspiracy. I'll admit that some of the above bullet items are exagerated' but the "gut indicator" certainly was not innate. Moreover, it was not until the H.E. received a larger weighting in the decision making process (short and long term alike) along with understanding the importance of time did my P/L see it's largest gains. Learn to sit on your hands every now and again instead of perhaps being a srs-flipping-action-junkie-who-probably-heads-over-to-pokerstars-after-the-bell in order to feed the compulsive need to continuously make quick and uninformed decisions about what's going on in hopes to strike it rich. If this offends anyone: Bite me. If so, you might be familar with this quote: "Eventually all money flows from the weak to the strong". You fall into same category as the mouse-clickers-based-on-cnbc-breaking-news-banner types. (See above bite me)
What works for me might not work for you. Who doesn't make mistakes though? I had to re-learn more than one thing and have ignored the obvious or got long/short just because something was OB/OS only to be gently pimp-smacked and reminded [most recently in soybeans when it nearly left the Milky Way]. I'm a slow learner :) Nonetheless, I think "HE" should be taken into consideration along with the technical and fundamental.
I hope this was presented in the most incoherent manner possible. Proofread? Spell check? What's that? I thought that's what the "(update)" was for?
PS. Will have to start the 'Digital Dickweed Vol N' next post. Gotta run. Although the importance of Time/Patience I accidentally learned from one of those dickweed's post not even related to trading (iirc, I took away the important message and not the details). His name is Zen Master Mish. He's probably not too concerned with the Kaleidiscope of "Breaking News" banners. I'll admit I could use a little more patience/time when typing these posts :)
PSS. If you are still long KWK, might be the end of the road right here at 10.50. I didn't think it would take out 9.50 though (H.E. case and point), but now it's ripe for a pullback (if not more than a pullback). Warning.
