WAMU Update

Position is still a little underwater but the expected earnings results were was as anticipated - mainly reflecting poor lending results and a large increase in negative amortization (interest added to loan balance but no cashed received) to $278 million out of $700 million earnings (approximate).

This is mainly a technical update. The stock has broken through the 10, 50, and 200 dmas on decent volume to the $42 area. I expect a retest of the support at $41 sometime in the following week. Then depending on market performance we need a Dow selloff to get the capitulation day were looking for - the stock could potentially trade as low as $36 where I would liquidate the position for a healthy profit.

Here is the longer term support and resistance points chart:






Here is the shorter-term break of the moving averages on volume as well as a recent distribution day highlighted in yellow as reflected by the volume indicator:

That is it for this week and a while. Have a great weekend and halloween. I will update again when we get a meaninful move in either direction or the positions expire.

Best regards,

BG