Trend

The recent market run up has is now testing the old Dow highs established earlier this year. Additionally, S&P 500 is at its highest point since 2000. Negative news in the lending front is like teflon for the major banks that issue home mortgages. Every bit of negative news does not affect any of the subprime lenders and banks. I believe the momentum has shifted towards the upside and now the trend is "up".

This tells me that it is useless to fight the tape and that more attention should be paid to the long side of the trade. It appears that the market has priced in a rate cut in the near future, even though, I continue to think that is impossible, it would be a losing proposition to fight the tape. Remember, the market is always right, and fundamentals do not necessarily reflect the technicals of the market.

In the current time, I do not think continuing to short on the way up on Countrywide is a prudent idea. I think that we should wait for the earnings release and cover our shorts.

I am going long on Google, CSCO, LHCG, CFC (into earnings).