Countrywide Financial (CFC)

Did you buy the “good news” yesterday? If you did you are most likely losing money and you are not alone. 150 million shares changed hands after the Bank of America announcement, some as high as 26.50! The huge volume and the fact that the stock closed below the average price over the last 2 days shows that the market was not impressed with the $2 billion. The reaction is very similar to the move that Goldman Sachs made 2 weeks ago when they announced they were adding capital to their distressed hedge fund. If “good news” doesn’t make these stocks go up, what will? CFC is in a downtrend and that makes it a very risky stock on the long side, ignore the headlines and focus on price action.