small word of caution MBI finished with red Candlestick today
after the run up. More often than not it means there is some follow through to the downside short term. Could try for 16 again and if it fails there may be about a 50% entrancement to about 13. I do not see any catalysts going forward unless the company announces it's splitting in 2, which at this point is speculation.
One longer term concern I have is Meredith Whitney's forecast of muni defaults. She has been dead wrong so far and they are rare, but she has gotten a lot right. I think muni's are in a very separate class from CDO's as there are more options to deal with the debt, raise taxes and layoffs. But this is probably a ways off even if true.
The balltle for higher prices for MBI lies with huge amount of shorts, that were torched and burnt badly; when MBI rose dramatically after the major risk was 90% removed in one week from it's MBIA's global operations.
I am certain you are licking your burns too.
I expect shorts to continue attacking MBIA with every conceivable reason why, MBIA will not be successful in regaining the number one(#1) position in the Structured Finance and Muni-Bond insurance industries, however, I hope they can come with some factual data and formidable comparisons as opposed to the argument you have presented.
With the Muni-Bond industry receiving upgrades weekly due to increasing revenue tax base from an improving housing market; now is probably the best time, since financial crisis of 2008 for MBIA to begin an active role in the market.
You can tell Whitney, what I have said and my basis for that conclusion and analysis.
Thanks for the reply. first I am not short and made some good bucks going long this week. I still think this is a better trading stock than buy and hold given the chart patterns. Also I am concerned we are in for a market correction soon, but I was wrong in thinking it would start near May 1. I have been surprised lately at the markets ability to be the Energizer Bunny.
One thing we do know MBI as with any stock which makes parabolic rises is prone to correction. Yes the news was good, very good considering the timing, and as I have posted believe NYS pressured BAC to settle with the possible seizure. I thought BAC would drag this out as long as possible, again I was wrong. I was also hopeful the settlement would have been larger. But in these parabolic rises it is traders, not investors or institutional investors buying. Traders buy hoping to unload on the institutions at the now higher prices. If this does not happen they unload. In this case all it takes is for the stock to go down for it to keep going down as it did on Friday, but the upgrade helped save the day. And actually I was again wrong here #$%$&P is usually pretty slow to act, and I was surprised they acted this quickly. Is all the good news priced in. Really you got me. I do believe if the company announces a split in two it will be good for the share price, but I have no idea if they want to, or the time frame we should be looking for.
I think the biggest negative in the short term is the general market , tis the season to sell. The short term base of buyers who will sell or buy on whatever direction the wind blows. Right now I would maintain looking at the charts 13 is a distinct possibility. But as I have said here in several cases I have been wrong.
I also said I sorta doubt a muni problem. But all the debt in gvt everywhere is a bit worrisome longer term, but I think it will be obvious when the poop hits the fan. 4.5 years of bull market tends to be a bit long.