The market snapped back from Friday's selling today on the broad indices, but under the surface, it didn't seem to snap back as vigourously. The market felt like it was trapped by the Massachusetts special senate election, in a wait and see mode. Clearly, the market is hoping for a GOP victory to bog down healthcare reform and the Democrat agenda. Generally, political gridlock is good for the markets (the financial meltdown of late 2008 is one glaring exception because the passage of TARP prevented an even worse meltdown). I don't know who wins the election, but I think the markets are going to sell the news either way and we'll just sell off worse if the Democrat wins.
No trades again today. I was quite busy with the darned dayjob, sadly. No pick today, either. The screens don't update to reflect the day's close until I'm guessing midnight, so there won't ever be a pick after the first trading day of the week unless I find a special case.
The big update today came out of CRE, which released an updated 8k. The fee structure was updated to raise the total payment to $8.90, with a provision allowing for a bonus to paid to management if it goes out over $9.25. Methinks such a provision wouldn't have been put in if management didn't think they would easily hit it. I'm thinking it'll be more like $10-$11 once it's all said and done. Even if it's $9.26, CRE's presently trading at $8.16, so that's a minimum $1.10 (~14%) upside, versus at $10 (~23%) or at $11 (~35%), which is still pretty respectable. I'm a buyer on any weakness, but I don't think it's going much below $8.
I didn't get into EME, RGR, CEU, and JST today like I wanted to. I'm not worried about that, though. I'll get a chance tomorrow.
I'm also looking to close out the sell leg of the FUQI call spread. They're trading down over 50%. I'll probably roll the proceeds into more calls. I'm wishing I waited to sell calls in CBI. Oh well.
Position: Long CBI, CRE, FUQI
Disclaimer: This is not a recommendation and is presented for informational purposes only.
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