Distressed Longs May Catch a Break
We get a big surprise in consumer confidence while hope springs eternal out of Europe. It truly is the season of giving. The market looks like it will soon be giving long-side traders who have been writhing in losing positions a chance to get out. The rally looks like it could get to $121.75 on the SPDR S&P 500 (SPY) before running into big resistance, with $121.55 as my minimum. This move would also serve as a gap fill, so the target may be obvious to many and become a self-fulfilling event.
If AMR (AMR) does not prove airline stocks are nothing more than lawn darts, then I don't know what will. There hasn't been a valid reason to own an airline since 2000. There are trades to be had there; one theory is that falling oil makes the airlines attractive for a trade. But then again, if the thesis is that oil is going to fall, then why not short oil or grab an inverse exposure to oil? AMR also proves that the circuit-breaker rule should be voided on stocks declaring bankruptcy. Do we really need a half-dozen halts on a stub that will be worthless in a few weeks and trading for little more than a shiny quarter?...142 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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