No FNM or FRE

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During our AM Call we remarked that FNM or FRE are not good stocks to trade today for new traders. There is a very high likelihood that the government will announce a bailout plan and the stocks will get halted. You do not want to be in a position on either side if they are halted.

The gaming stocks, LEH, energy are in play again. Stick with them.

Followup: We don’t trade stocks that have a risk of being halted. FNM and FRE gapped down in the premarket based on a New York Times story that reported that if their financial condition worsened they might be placed in conservatorship by the federal government. If this were to happen the stocks could go to zero. We therefore waited for a statement from the government to clarify what they would do in the event that conditions worsened for these companies. Once the announcement was made that the federal government would continue to back them under their current structure we began to trade both FRE and FNM

Chop SMB!

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