I'm not sure what just caused this air pocket in the market but these note from the Mortgage Bankers Association (MBA) that hit right at noon must have contributed to the slide:
12:02 MBA says U.S. MORTGAGE DELINQUENCY RATE 4.95 PCT IN Q4, UP FROM 4.67 PCT IN Q3 AND FROM 4.70 PCT IN Q4 2005
12:02 MBA says subprime borrowers more vulnerable to higher interest rates, slower home price gains or price drops
12:01 MBA pushes back forecast for housing market to regain footing to end of 2007 vs middle of year
12:01 MBA says delinquency rates rose in 49 states in Q4; foreclosure inventory rates grew in 44 states
12:01 Late payments rise for all loan types but driven mainly by subprime and FHA loans
12:00 According to MBA, Mississippi, Louisiana, Michigan had highest overall late payment rates across all loan types in Q4
12:00 U.S. Mortgage delinquencies, foreclosures rise in Q4 2006 vs prior quarter and year ago, according to MBA
Here's an intraday shot of QQQQ with 15 minute bars. Note the volume on the big drop:
Mike
Excellent posts, thanks for your guidance. That bear flag has worked out picture perfect! Always enjoy your educational material!
Yep , Mike keep looking for bearish setups in weak sectors…
Yet another shoe??? -- 14:09 Massachusetts says subpoenaed UBS, Bear Stearns over subprime research - Reuters
Yep, you called it.:d
Looks like the legal foot soldiers are trying to move a little faster on this latest financial scam and bubble bursting in our markets. One day, they will actually be ahead of the game. Uh, yeah right!
This stuff only matters, when it matters, right? How many shoes do we get to drop?
mike
love your blog..
i am looking to short IBN,EEM,CFC (FED?,NDE?)
what is your opinion?
thx
sam
Sam,
CFC is one stubborn stock. I've daytraded it a few times over the last week, including today. The damn thing just will not drop like it's "supposed to". x( I wouldn't want to initiate a swing trade short here at the lower Bollinger Band. The risk:reward was much better 4 days ago.
Ditto for FED and NDE.
I like the other two better since they still have some room to the March lows and/or their lower bands. good luck!