Not much has changed from the last game plan, especially since it was only two days ago. It looks like the last few days have been all retail trading. The volume has gone back down to average, which suggest there hasn’t been any manipulation. There seems to have been a lot of fear and confusion in retail, which was the point of the previous wholesale campaign to kill the loan rally. However, today showed some signs of better sentiment in retail. I will be watching to see what wholesale’s next move is if, in fact, retail is starting to rebuild some confidence.
From the last game plan I said wholesale was in complete control of this, and they want it to go lower. Further evidence of that being true came out this week. The short interest roses again ending 8/31. During 8/9 and 8/10 there was a waterfall on very high volume. I thought then, and I think now, that wasn’t accumulation by wholesale. Wholesale was actually driving it down by shorting.
On 9/5 was the loan announcement, financing without dilution. That should have been enough to reverse the trend for several reasons, but fell into the red after a good move up. I don’t know if wholesale knew about the loan or not, but they used the news to create fear. It was good news that they manipulated to be perceived as bad news through price action. From the looks of it now, they did a very good job as retail is full of fear and confusion.
From the last game plan it looks like the second scenario might be in play. Good news about raising cash without dilution came out during the week and was received poorly. Like it or not, despite the improving fundamentals, this is trading strictly on technicals at the moment. Therefore, technically, I see no reason to buy this now as I haven’t and won’t until I see some indicators turn positive.
It is my opinion that the retail buying now, because it looks cheap, are about to have bad buyers remorse. For their sake, I hope I’m wrong.
Unfortunately, I’ve been holding this one for a while and been getting my butt kicked! I’m not tracking this one in my Trade Book because it was an open trade before I started using the techniques I’m using now. For the record, if I would have know the things then that I’ve been learning and studying now, I would have never taken this trade when I did. So, now I’m going to try and apply some of these things I’ve been studying and see if I can figure this thing out.