Summary:
Finally some volatility! Unfortunately the result was a 3% loss. The big hit occurred in agency MREITs (ANH, CMO, NLY, and MFA). Though I only own the first two outright, the short puts I hold also got hit badly. The cause was strong hints by Fed Chair Bernanke that the next direction in rates is up. This will cut margins in these companies. The question is was the reaction overdone? I think so, but will probably lighten up opportunistically.
I did very little trading during the storm. I sold some NRF, and got hit on an order to sell July 12.5 CMO puts. On Friday I closed some TOL, as homebuilder stocks look to be recovering and sold some CHNG to fund estimated tax payments.
After the recovery Friday, I’m cautiously optimistic, but perhaps this is only simplistic extrapolation and wishful thinking.
Positions:
Long: ACY AHR ALSWF ANH CHNG CNEH EPMWF GA GREXF MDNNF MEAOF MLKKF NLY NRF QADMF RICK SFI SGTI SNEN XSI WHX
Short: GCI KBH MEG MNI TOL.
Calls Long: ANH Jan 7.5; CMO Nov 12.5.
Calls Short: NRF Jun 12.5.
Puts Short: ANH Jul 10; CMO Jun 12.5, Jul 12.5, Aug 12.5; KBH Jun 20, July 15; LEN Jun 17.5; MFA Jul 10; NLY Jul 20, Oct 17.5; NRF Jun 7.5, Oct 7.5.
Cash: 5.5%
Short Pct: 9.9%
Read:
Stocks Researched:
Positions most worried about: .
Positions most sanguine about:
Biggest market worries: rate rise risk to amREITS.
Thinking about:
Outlook ( up-flat-down surety rating: 1-5 reasoning):
US: flat-down, 2.0; still not out of the soup.
Tech: ??
China: up, 3.0; strong economy and has fallen alot.
Silver: flat s/t, 2.0, price action; l/t up, 1.0, industrial demand, but price rises.
Gold: who knows? has risen alot.
Copper: flat-up, 2.0. China demand.
Zinc: flat, 2.0. Stocks stabilizing.
Real life: projects going ok. Energy level seems to be recovering.
Weekly sleep and exercise: not much exercise. Sleep decent.
Mood: a little turgid
