Fannie Mae-No Politics (FNMA)

[obiterdictum]

Short sales continued apace during the week at greater than 30% of total volume (See FINRA ORF files). Short interest on average has been reported at about 8 million shares on a semi-monthly basis (See OTC Markets Short Interest data).

So with about 8 million short shares needing to be cover on any one day there was real downward pressure via preset limit orders to cover the short positions as the FNMA and FMCC price rose above the short positions taken. There was also likely stop loss orders for those fearing loss of unrealized gains made during the week in anticipation of a falling knife. Add to that a horde of inexperienced retail traders coming along and following and chasing the price and who generally have weak hands and the bigger investors and MMs looking for cheaper share prices for investment and for covering short positions taken to "deliver shares" for competitive market marking (See tick data) and you have the dip underwent today.

Agreed. When the dip in price exceeded the "prescribed" support levels fear set in and there seemed to be panic selling going on as if there would be no ramping back up...

There is certainly a different trader/investor demographic than in May. This time there are bigger, experienced investors and traders and a wiser set of informed retail investors with long positions ready to hold.

If all the DD has pointed to success speculations about future pricing and GSE status, why would investors sell if there is a "disturbance" like today? Buying the dip if there is cash or holding would seem to be the most profitable behavior.

Day traders should have had a good return with the dip and reversals.

So as anticipated an interesting day in the market and GSE common stock is trading significantly above $5.00 dollars.