Not looking very good for the shorts....
IMO yesterday was a coordinated effort to short FNMA going into the Zillow conference. The bear raid hoped to capitalize on dooming comments from the speakers to cause panic selling into their raid.
Although the stock got hammered from its highs, I am calling the raid a failure. FNMA stabilized in the $1.95 area when the politicians did nothing more than re-state their existing opinions (thanks obit).
Something is going on here, and it is positive! Contrary to what many believe, I do not think this is an earnings or JPM settlement play. I have said this before, these events are priced into our share price. Housing start ups are made public weekly. It is no surprise that FnF are turning huge profits. As for the JPM settlement, these banks are going out of their way to settle. Yes for 40 cents on the dollar, but still are actively trying to settle. JPM will settle as will others, this is baked in.
This move is based on something more. I believe this move is because the tide and sentiment are turning in FnF favor. A lease on a new building and the PR of a new hire this week say that FnF are not going away!
What good are billion dollar settlements and $10+ billion quarterly earnings if FnF no longer exist a year from now?
I cant imagine shorts wanting to stay short over this weekend. Their raid failed! I expect an attempt to lower the PPS soon, as to allow them to cover. From that point on, it's up into the close and into next week.
GLTA
Chenzo
