Added To A Loser
I added to my market neutral Long Loews / Short Home Depot trade. I am down a little over 1.5% on the original position. I see no reason why Home Depot should trade at over a 25% premium based on 2012 free cash flow estimates. Loews aggressive share repurchase program makes it likely that this valuation gap will close.
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4 comments:
do you give any consideration to the adv/dec ratio is negative on a day when the market is making a new high on the current rally? i usuallly find that is a marker for trouble ahead?
The market could probably use a rest. The S&P 500 has been up 80 points since the lows on Monday.
It's one of those strange days when just about everything is up; dollar, bonds, gold, stocks. Though, of course, as pointed out, most stocks aren't actually up.
Going sideways here with short term overbought conditions (by some indicators, not all) is bullish.
And there's lots of put buying, adding to the positives.
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