Tuesday, November 23, 2010
Here's the chart:
BAC had another ugly day today on very large volumn relative to its average volumn over the past 30/90 days. Some of the biggest holders have folded their tent and it sounds like more are following. Right now BAC's price is being "managed" lower in that neatly defined downtrend channel above. Check out the TRIX indicator, a momentum indicator which "slows" down the direction the trend oscillations. It's good to use when looking for clues to longer term trends.
BAC is now solidly below its 50 and 200 day moving averages. That is also very bearish. Fundamentally it would appear as if this fraud-riddled carcas is getting ready to be snuffed. They ("they" being Geithner and Bernanke and Henry Paulson) stuffed Countrywide and Merrill Lynch - two hugely fraudulent Wall Street creations - into BAC in order to shift the burden of monetizing the fraud onto the Government. Now they'll go in for the kill and bury all the evidence, just like so many before it: Enron, Refco, Amaranth, Lehman, and Bear Stearns. Of course, first they'll let the Pimpcos of the world flip fraudulent mortagage paper back into BAC as per the terms of the mortgaging servicing agreements under which BAC is liable.
I am playing this using May 2011 8-strike puts. If you are invested in any mutual funds which list BAC in the top-10 holdings, you should get rid of those funds now - the managers do not know what they are doing.
Posted by Dave in Denver at 2:28 PM