Today is going to be a very interesting day with all the testimony taking place in Washington,D.C. concerning the economy and the bond insurers. MBIA (MBI) is very upset about short sellers and has been making a stink about it. Short sellers and short selling in general can be the topic all in itself (note to self, write an article about the history of short selling).
The study of the markets goes well beyond just reading charts and technical analysis. It is important to have a broad knowledge of how the economy and the markets work. And Lisa and I have studied much about the economy and markets in our years of experience. Knowledge of history is always important in predicting the future for while every day is different it is the knowing of where one has been to help understand where one is going. Throughout the history of the stock market it is short sellers that bring a balance to the markets. Without short sellers there would be nothing to offset the ‘stock pushers’. Short selling is an integral part of how the markets operate and without them the markets would resemble a Marxist Government. For MBIA to complain about people who short sell their stock and those who do it I say to MBIA "nothing to hide… then nothing to worry about". In history it has always been the companies that have been in trouble that have complained about short sellers.
The weekly initial jobless claims data came in this morning and were down, but the average continues to increase. Futures are flat to slightly negative so far.
Expect volatility today on the comments taking place in Washington today…
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{ 5 comments }
are you guys still keeping your short position on the Dow despite the news of the trade deficit and jobless claims?
Hello Iwan..
Yes.. the jobless claims and trade data was neutral. Resistance is the overwhelming factor playing on the market at this time. It will take a substantial buying pressure to break resistance. But just an in any trade if the resistance is broken we will quickly close the trade and re enter at the next resistance level.
Our trades on the DXD are a normal swing trade allocation which is no more than 10% of our total capital. We never go more than 10% on any trade.
Chuck and Lisa,
I have been daily looking at your watch list and open list for the trades that you are in. Are you keeping them current? At this time I am watching the DXD trade but have not initiate any trade.
Thanks,
Michael G.
The best way for a company to defeat short sellers…….make big profits and grow the business. Eventually the shorts will break if you run the business correctly. No whining allowed…..
Michael,
We’ve been in cash, so Chuck didn’t update the trades. But we will. DXD is the only trade we are in right now.
Dave,
Agreed!