News release on FNM and FRE discount window opened …fre@7$ could be up big

If you are having problems don’t feel stupid..it doesn’t get much tougher than this!However this creates oportunity.Just do one thing.. be right!..Today is the deadline to  sign up for the contest and still be eligible for the grand prize.Now many would say it is too late to catch up with the current leader.Not in this market!….one false move and the leader will crash and burn..I still think the winner will turn out to be someone who forms a opinion about whether oil or gold or some other commodity will go up or down and:”bets the farm” by taking a large bet on a stock in that category that could double.It is a shame the contest did not allow shorting because that has been the winning strategy for most stocks in this market.However you can use the etf that trades double up on a down move such as the “dug “etf there are similar short  etf s for s&p, dwia.The problem is  it is hard to get enough leverage to make a big score.I still think that playing long  airline/gm in the<10$ if you think oil will fall or long the small drillers in the 4$ range if you think oil will spike will be a winner…. if you are right.If you want to play huricanes check out low float ipii..largest independent  building supplier in Fla Louisiana area ;this stock quadrupled in the Katrina storm.Also matrix indusries they repair oil rig and factories/ plants in the Panhandle

Tell you something you don’t know right!.Very few ideas are working in this pessimist market.Remember that contestants cannot be as nimble as pro traders since the contest requires you to hold positions overnight.On the other hand many contest leaders have been whipsawed and seen large gains wiped out by wrong decisions[or right trades that turned wrong overnight and caused huge losses before they could be exited].This means even  late entrants that are right have a chance to win.So there is hope.But what  to do? 1]look for special situations; like earnings reports.A short in RIMM would have payed off hansomlyafter they disapointed.Go with what we know=pessimisim.Therefore why not short stocks that are due to report earnings.in this market it never seems to be good enough.2]Develop a opinion about the price of oil ,gold and the market in general.Use the etfs such as the dog ,dug, gld  to make a bet.The volatility is such that being right will produce large gains .If you think oil has topped go long the airline stocks.AMR will pop 30%ON A BREAK IN OIL PRICE BELOW 130.The small cap E&P stock have got to be stretched in price .They will drop like stones as well in the event of a break in oil price[ like BDCO  ].Gm is on its way to penny stock status…or is it? will Kerkorian or some other raider take a run at the Grand Dame of American carmakers? .Gm went from 30-12 in less than a year.It went from 20 -12 in less than 2 months..A very interesting speculation.If you think oil will keep going up it is probably a short.If oil breaks below 130 Gm could “rocket”up to 18 in a Detroit minute.                       But what will oil do?.Don’t know…… but I will throw this out….This is the 4 of July week end.All the Media will have stories on the effect of high gas prices on holiday activities.Many times in years past the entry into the summer season has been a short term peak in oil prices .Buy on the rumor-sell on the news…Is this the”NEWS” that the oil traders will use to head for the doors ?Watch what happens if/after oil gets above 140.If it cant stay above 140..the party may be over for a while ,and the oil trades mentioned above could be winners!                                .

CNBC is about to profile beaten down shoe maker HLYS as a short squeeze cadidate @$4.37…I would add crox…has been pretty steady round 10$ for a while.Seems like a long shot…Altucher is speaking… calls it possible double…says shoes are out of stock at stores[is that cause they don’t sell and didn’t reorder? lol]did mention CROX as well. Update 2:44 est. Jim cramer say new canvas Crocs are ugly and he would take other side of trade…[short or don’t buy crox]

An anylist by the name of Scott Barbee makes a convincing case for FBR.Now,I am a bit familiar with this stock, having owned it years ago when it changed from a Investment bank into a REIT.At the time REIT[real estate investment trusts] were very popular due to the favorable tax treatment and the sucessful conversion to this format by other corporations..That was before subprime.Guess what they invest in?yup… mortgages.The stock was a disaster for me then; I sold it at $7 bought at 15$.That was years before the subprime meltdown as well!.But it has got worse..it is now trading at$1.60.To say this stock is hated is an understatement.However in many ways the stock is a poorer version of Analy mortgage.They invest in mortgage loans and work off the spread.Analy is the best of the group and it has been hurt too..but not like this!.Mr Barbee claims to have looked through the mortgage and agency bond portfolio and finds it not as horrific as it’s near bankruptcy stock price would indicate.Why would this be a possibility for the contest?..1]low stock price =much leverage.$3 is a 100% gain.2]Financial stocks have been pounded into the sand for the last 7 sessions.They bounced on Fri and were up today.A strategy that has worked is to find stocks in a sector that is out of favor,but is coming into favor,and have not participated yet. 3]limited downside=good risk reward.Don’t fall in love with this stock! shoot for a coat tail ride if the financials have a good week .Goldman Sacks and other big companies report earnings this week.Look for plays in this volatile sector this week!

A tidbit I caught today…If you saw my earlier posts I am skeptical that SIRI is a good stock to win with for this contest.however today A government representative [FCC?]was on CNBC.If you did not see it he was asked by the reporter.When do you expect to wrap up your review?.He gave the usual WSO..Poker response.basically;” It’s very complicated”.At this point ace reporter David Faber pressed him”Sir; respectfully, this has been going on for over a year..don’t you owe the company a answer; like tomorrow?”.The idea of this pointed question is to try to get, what is called in poker”A tell”.You minght want to see if you can review that clip on the cnbc site.My take was that maybe something is up.Naturally he gave a non commit answer” like we expect to wrap it up soon”.Which has been said before.What is different ?The bush administration is in its ending days.Frequently contriversial decisions are postponed till the end of congresses session.;.can you say summer recess?.you get the idea !..if this deal is to get done; it has to be before/if …the democrats take control of the FCC and congress.Expect something soon.But don’t expect a huge move[like a double] If the deal is approved.Still it could run %30 on news of a deal.Timing is everything.As I said I don’t think this is the greatest stock for this contest;but apparently this is the most widely held stock by contestants;so I thought it was pertinent.

Crox.Expected to earn $1.70 /share.huge short interest.everyone hates it now. down from $50 to 9$.Heh Heh.I like this one to buy outside of the contest but I would’nt bet the rent money.Could be a nice pop for the contest.What if it took a upgrade?or a agitator like Carl Ichan takes a stake?.You could get your 30% and move on.

This years contest is made harder by the addition of the currency trading option.it was stated that the top contestants have made 60,000$ trading currency primarily the dollar vs. euro.I am not sure the time frame that occured.That being said if you are unfamilar with currency trading[ like me ]you would probably be better off  skipping that portion of the competition.It is quite possible that the combination of the two will not be  in the eventual winners portfolio.Today I wanted to mention the small cap E&P oil companies.These volatile stocks have showed wild price movement.Check out ROYL and OMNI for example.Now you can play these either way ; if you think that oil price will tumble you could short these or if you are bullish buy on the dips.I have seen these stocks spike 30% in a day.They did the same thing after Katrina.Speaking of hurricanes; the season is on!.One way to play hurricanes that i did after katrina is MTRX.this stock does industrial repair of the kind needed on power plants ,refinerys and some drilling rig work.It can really soar on  a landfall in the gulf.So keep an  eye on these!

Well it looks like if you had played the ethanol stocks you could have banked at least 20% depending on your entry/exit day.Hope some did….As stated in previous post;…there is little hope in buying popular choices like Siri or Rad[down about 10% since contest started].The fact they are penny stocks is good;but not enough alone, if there is no catalyst to force a large move SHORT TERM.Many contestants have grasped the concept of leverage .And since options are not allowed in the contest,using low priced stocks is one way to increase leverage.Simply put ;the chances of a $2 stock doubling are much greater than a $40 stock doubling.But most $2 stocks don’t double; and in fact many go out of business.It is not enough to   find  under$10 stocks and “hope”.                                                                                                                   What is a example of a low priced stock that has potential for explosive move quickly?.The headlines are replete with new highs for oil.Hurricane season officially started yesterday.You can play this trend on the bullish side or the bearish side.Take a look at the small independent oil producers.These stocks can, and did double in the past as traders looked for under followed energy plays.Stocks such as NGAS,BDCO are examples of this kind of stock.They are in a “hot” sector,have a low share price,and most importaintly have a low float[few shares issued].Low float stocks can make explosive moves  when buyers come in the name.Share price can move rapidly. Stocks which were low float “monsters” in the past were TZOO,HANS,TASR.They are not anymore!!! but if you look at the charts from several years ago you can see the kind of moves possible.We need to find such stocks now!.The existance of large short positions can make these a killing field for shorts;and a possible winning trade for the contest!

First the WCG idea didn’t result in a merger Monday anouncement; but at least it is flat from Friday if you decide to move on.Today we observe that PEIX and many of the other ethanol stocks are up big.in the case of PEIX about 40% since Fri[close$3.24 high so far $4.88].Now normally it minght be to late.But these stocks have both a low price and a catalyst to make them continue unlike say a SIRI.First Peix was as high as $40/share in recent times.The short interest is huge.20-30% of all available shares are short.Almost all anlyists have sell ratings on these stocks.So why is Peix up?.They beat the earnings estimates.This may be a momentary “dead cat bounce”or it may go on for days or weeks…as the shorts are forced to cover there short positions..fueling a move in the stocks