SHORT THREAD!

[nullzero]

TOA another small cap Home Builder. WCI released earnings today they came in down sharply.

http://biz.yahoo.com/ap/060809/earns_wci_communities.html?.v=1

[nullzero]

MHO and BHS two other smaller gapped home builders worth researching for a short.

[joet]

ZMH short just was stopped out... if it continues to rally i will look to short again, sure seems over bought! cheers joe

[nullzero]

ZMH chart looks very similar to the AAPL chart. I expect it should pullback soon.

[nullzero]

ZMH being one tough overbought stock... Lets see if it gives way some the rest of the week.

AAPL looking good plan to cover when it drops to low 60s high 50s.
PHM covered today for over 1% gain
TARR shorted today
TOA shorted today

Note to self got to short more of Terliso's plays lol

[nullzero]

Damn I didnt play the CFC short! It got battered badly! Closed down over -8%!

[nullzero]

Here is a nice read on how the consumers are tapped out. Talks about the credit etc. and how people are at the breaking point now and and filled with debt. This is why we are seeing the lenders suffer... There is hardly anyone left to lend to that doesnt have debt through the roof.

http://globaleconomicanalysis.blogspot.com/2006/08/tapped-out.html

Now how can we profit off of this? I think it is easy if we can sucessfully identify stocks to short that will suffer greatly from a tapped out consumer... Lets see... high end retail? home builders? consumer electronics? Right now its almost certain the homebuilders will get hit hard! The supply is just building up and the demand is shrinking... This is why I believe that shorting the medium to small builders is a good shorting plan because chances are the smaller guys will get screwed over in a bearish housing market, maybe even some of them will go bankrupt. The large homebuilders will continue to decline as well. So housing will have a direct effect but what is next after housing to feel the pain? I think Restaurants will feel alot of pain... when your home value declines and you dont have that free home ATM and the gas prices continue to squeeze the consumer people will have to cut back somewhere... The restaurants is the first place people would naturally cut back... less eating out saving money for the basics like gas, home mortgage, etc.

So who will get screwed over the most in the Restaurants? Im thinking familly restaurants, this is where families will need to save money and eat at home more with the family. Since in a family restaurant you have a typical family of 4 you need to pay for and the meal can add up fast espically at some of the pricer family restaurants. Here are some stocks I think we can make money on shorting;

(CPKI) California Pizza Kitchen Inc.
This stock is sitting right near 52wk low it looks like its ready to break the support and tumble... CPKI nice pizza but PRICEY menu... a upper scale family restaurant that I feel will FEEL the PAIN of a consumer spending less. CPKI still has a PE of 26.11 the industrial average is a PE of 17.76.

(PFCB) PF Chang's China Bistro Inc.
Nice chinese food but HIGH PRICE! This recently had a rebound from what looks to be a short squeeze bounce. I think this will blast through 30 soon and make new 52 wk lows. PE of 24.41

(CAKE) Cheese Cake Factory Inc.
Im sure most are familar with this one nice tasting cheese cake but the bill sure adds up fast! With a family of 4 the bill shoots through the roof. Consumers will definately skip the cake when there wallets are hurting. PE of 20.05

I think all three of these family restaurants which all have PEs over 20 will suffer greatly and have lots more downside to come. I would say this is the situation like the home builders where all of them will head lower. The restaurants earnings and outlook has been very bearish from the major restaurants that have reported or warned about decrease in earning outlooks.

[joet]

Shorting OATS here at 15.35 or so (see if it gaps down) today it broke down through Terliso's 3 magics!!!  Look at WFMI same sector broke the 3 magics 2 months ago, now down 25% from the break through!

My trade will be on paper as i am learning and playing these trading plans.  Terliso would you see this as a good entry short on OATS, where as WFMI is more of a short into the hole (melf  ) Or would you consider the bulk of the move to have been made to this point?  OATS still has a gap to fill and little support down to 13 or so...

Paper plan: short OATS on open, hopefully above 15 with a target of 13.01  (after 4 big down days it seems like it may be a poor time to enter... possible rally around the 3 magics..  Lets watch.
Cheers Joe

[nullzero]

Covered my ZMH for a 3% loss . Shorted more AAPL 

[nullzero]

I found a potential short play, (CA)

CA  $ 21.77 
CA Inc.  0.11 
Shares Short 18,939,086 
Days to Cover (Short Ratio) 6.4 
Short % of Float 4.25 %
Shares Short - Prior 18,832,103 
Short % Increase / Decrease 0.57 %

I shorted this one in the past and covered in the 19s. Now CA just released terrible earnings and are cutting over 1700 jobs which is a about 11% of there work force. Here is the bad news.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB145BAB0%2D8ED9%2D4D6A%2D90B0%2D74B72DA15657%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

I would say CA should restest 52wk low at 18.97 and continue down.

[nullzero]

Two more im eying for possible short plays... ESPD and TRFC

[joet]

Howdie Nulz
I covered my AAPL a couple of days ago to free up assets.  My AKAM, PHM, OMNI and CKXE shorts are doing well all approaching 10% gain or there already.  I shorted a smaller position in ZMH today
I feel that AAPl will bounce around here in the mid 60's for some time unless the entire market has a slump...  I still fell that the big GAP will get at least partially filled but it may take some time and i wanted to try to make those losses back elsewhere.

Are you in on the TNEN.ob ride??

Terliso i Jamin'  see AAGH as well!

I was surprised that you covered PHM when you did.... I appreciated you confidence in that short when we were in the Hole over $31 and Melf flipped it, boy i bet Melf wishes that he had held!  The RSI is holding at 40, but with 5 consecutive down days i will be tightening my stop on PHM in the morning if it looks like the Market is up...  Hopefully flip it like you are trying to do.  think we will still get a rally to 30?  thoughts on OMNI and the double top breakdown?

I will look at your picks from today now!  Thanks for the posts (I believe that RGEN would be a good pick for a longer term hold, around 3, solid company.

Cheers Joe

[nullzero]

I covered PHM to free up funds I was up on the position and decided to take a slight profit over 1%. I entered TARR though, well I want to re enter my PHM short... maybe tomorrow we will see. I feel AAPL is going to get hit some more might see 61s tomorrow or lower.

[nullzero]

Havent looked at some long plays until the market loses some points.

[joet]

Nice call on TARR, I am just watching that one.  Be careful entering a short on PHM now... after 5 down days i figure that there will be one final sell off in the morning and then they buyers will step in to take advantage of the cheap shares...  perhaps that is what you figure...  I am hoping to to cover and then let it recover, hopefully to the 29's and short again...  but there is something to be said... i believe that elite G or Ramsburg said it... Use it and leave it...  If i had left AAPL alone i would still be ahead   I also see value in playing a stock over and over as you get in tune with the gyrations.. thoughts on the different strategies.
Cheers joe
PS  Do not miss the nice long opportunities out there... as Terliso says "ride em both"