AEC and CLP just shit the bed. CCJ breaking down also. BG following.
Let’s ignore CCJ and BG; the fact that AEC and CLP are bleeding out like so scares the shit out of me. Both should benefit from lower interest rates, as they are using cheap mortage rates to fund expansion. These are small names here; are we back to forced liquidation territory?
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People who game the Fed get what they deserve. Everyone knew what this program was going to be and they bought the market the past week based on rolling out bonds. How does that help the market? Because 2% is too high? All this means is another reason to short financials. Sitting happy tonight on GS and CM shorts. Like I said the other day you should look at Canadian banks. They are bought based on high dividend yield but the dividends might not be stable when there are limited earnings (due to flatter cash vs 5 year yield curve). And the other beautiful part of the short Canadian banks is the fact they are largest portion of the Canadian mutual funds portfolios. As retail guys get scared of the broader market they are forcing these banks lower.
I sold out of AEC and CLP a couple weeks ago because they didn’t act like the “port in a storm” I was expecting on the last selloff (the CEO of AEC was also dumping which made my decision easier). Unfortunately, I put some of the money into GE, which was a truly fucktarded choice. During these monster 3X leveraged ETF selloffs nobody gives a shit about value or dividends. I’m thinking next week might be a good time to lighten up if we have the usual magical levitation of month and quarter-end window dressing, especially if shorts get too cocky.