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Playing the Ponzi
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Why “Playing the Ponzi”? I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is created as debt, and running straight through a global economic model that is based on infinite growth in a finite world. This won’t end well. I’d go a step... More
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Playing the Ponzi
  • ITB An Interesting Short Candidate? 0 comments
    Nov 21, 2012 1:40 PM | about stocks: ITB, IYR

    Much has been made recently of the housing recovery that appears to be taking hold in the U.S. While the news is newly prominent in the mainstream media, the market has been pricing in a housing recovery since the start of the year. It may be that the good news is already baked into the securities. Chart ace Chris Kimble has noted IYR (Real Estate ETF) as an interesting short candidate. IYR has indeed underperformed of late - much moreso than ITB. ITB is currently testing resistance that could serve as the right should of a 3 month Head-and-Shoulders pattern. It had previously broken down from a 6 month rising wedge, but found support at a year-old rising trend line. It may be worth noting that MoneyFlow has been declining for the last 6 months (red line sub-graph) as the stock continued to rise.

    (click to enlarge)

    With so much bullishness on housing, this seems like a fairly contrarian play. My exposure is limited to some $21 Dec Put contracts at this point.

    Disclosure: I am short IYR.

    Additional disclosure: I own $21 Dec Puts on ITB, and $65 Dec Puts in IYR

    Stocks: ITB, IYR
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