Stocks for the Rest of Us
Archive for August, 2008
Acorn Program Provides Low Mortgage Rates For Us Poor People
Aug 29th
I encourage anyone shopping for a house right now to check out Acorn Housing and see if there’s an office in your area. Depending on your income and your area you may qualify for the program which can get you rates otherwise unattainable even with perfect credit. Here in San Diego the program guidelines are as follows.
- 8% down payment minimum required……
- No Private Mortgage Insurance
- ½ point off on a 30 year FRM (this is half a point off the prime rate)
- Income Limit is now $ 90125.00
- Area Median Income now $72100.00
- 80% $57680.00
- 50% $36050.00
- Income = 0 – $36050.00 – 1 point off and $3000 dollars towards closing costs
- Income = $36051 to $57680 – ½ point off and $3000 dollars towards closing costs
- Income = $57680 to $90125.00 – ½ point off
You go through a one on one budget session with an Acorn counselor and once you’ve got the required down payment you can speak to a loan officer from the affiliate bank. The great thing about this program is that it will give you access to interest rates well below market even without a perfect credit score. So if you make less then 90k in San Diego then you’re eligible for at least a half point reduction on your interest rate. Free Money!!
Fast Money Review: FXB short, british pound
Aug 28th
The Fast Money crew tonight recommended a short of the british pound via the FXB ETF. While I agree on the fundamental reasons for this I can’t get on board right now until the technicals line up with a more favorable risk/reward setup. The FXB has been in freefall. If you want to short this thing, wait for some strength and then short it. Shorting it down here will require a loose stop and if you’re wrong you’ll lose a lot more money. Stocks usually don’t go down in a straight line and it’s so far away from the 50 day moving average the chances of a bounce of snap back reaction rally are high. Wait for some strength to initiate your short.
FXB short
Free S&P 500 Oscillator Update
Aug 28th
As you know I like to follow the free stockcharts.com S&P 500 Oscillator to gauge overbought or oversold conditions. As you can see we’re still stuck in this consolidation pattern after the huge run we had in July. Although the action may not feel good this is actually fairly healthy. We had a huge move off the lows and a little consolidation of those gains is good. The key is that the selling be contained which so far has been the case. The markets are showing strength today and I still think we’ve got some upside left to the low 1300s or so before I’d start taking profits.
S&P 500 Oscillator
Fast Money Review: UUP, US Dollar Trade
Aug 27th
The Fast Money boys all like the USD for the last half of this year and so far that seems to be working out well. If you’re not already in I don’t think it’s too late. The dollar was beaten to death and has a long way to go during recovery. Wait for a pullback to enter and set your stop just below the big gap up in early August. So far the stock has been acting very well after the big move up. What we want to see here is a tight consolidation or a low volume pullback after the huge volume spike on the gap up. The big volume means there’s a lot of money going into this trade so if it starts to fall apart it will do so very quickly. Protect yourself with a stop.
UUP
Personal Finance Content Coming Soon
Aug 27th
I’ll be adding a personal finance category to my blog as I often come across articles and stories related to this subject that I find quite interesting. It will include just about anything related to finance from housing to savings accounts. Leave me a comment if you have any suggestions.
Hurricane Gustav Trade. Gustav Juices Up The XLE Trade
Aug 27th
My XLE trade is panning out quite well now with the threat to the oil refineries and drillers from hurricane Gustav. If you’re not already in I wouldn’t jump in right now. I’m going to let this trade run until it starts to show some weakness. At this point, the responsible thing to do is move your stop up to previous support to lock in some gains in case the trade falls aparts on us.
XLE
ENI S.P.A, Italian Energy Provider In the Sweet Spot
Aug 25th
After a monster correction ENI, ticker symbol E, could be a decent buy down here. These guys have averaged almost 18% growth over the past three years and pay a 6.70% dividend yield which will offer some support on the downside. Technically this stock is in a sweet spot, it’s pulled back to a longer term upward trend line and MACD is starting to turn up indicating a bullish posture. It should have some decent support down here around 60. I’ve personally added this one to my retirement account.
E
Wall Street on Vacation Makes For Choppy Trading
Aug 25th
The trading action today was again choppy as most of the big wall street traders are most likely on vacation. Volume was low and the moves were jittery. While the major indices are not overbought they are definitely far from being oversold. Therefore you need to take a defensive posture. I’m still net long but I sold off some energy related stocks such as PBR and SJT last Thursday on the big spike. I continue to hold my XLE long position with a stop around 72.50. Seeing as how we’re not yet oversold I would not initiate any new positions here as the risk at this point is too high.
It’s Quite Possible Fannie Mae and Freddie Mac Go Out of Business.
Aug 20th
Although it seems unfathomable, it is quite possible that Fannie Mae and Freddie Mac will cease to exist in their current form. The equity market is telling us that these guys are going away. The debt market is telling us that Fannie and Freddie’s business model is broken. Corporate spreads are widening for them and if they can’t obtain financing at a reasonable rate then they are useless. Amazingly, the market is starting to come to this realization and is accepting this fact as today’s action indicates. Freddie and Fannie both lost about 25% today yet the broad market was able to shake that off and produce some gains. Even the financials were able to eek out some gains.
XLE, energy bounce looking good
Aug 20th
My XLE trade is finally starting to show some life after chopping around in the 70-72 area for a couple weeks. What’s good about this trade is that it isn’t completely tied to oil itself. The XLE contains a number of businesses from refining to drilling, and tends to move more along the lines of the big Integrated oil companies rather then oil itself. I think if oil can just stabilize itself around here this will allow the big integrated oils to move higher as refining margins widen. I would continue to hold this trade and add to it on weakness over the next few days if you get the chance.