Lehman (LEH): Selling What He Can, Not What He Should...

Lehman closed up +1.4% on Friday, on low volume, and high rumor traffic. This weekend the London Telegraph is joining the band and issuing thoughts about the timing of Dick Fuld's next move.

Clearly, something needs to happen at LEH before they report the upcoming quarter. The question is what is it going to be? Fuld has compromised himself and his firm on many levels. The long term damage to the Lehman name may be irreparable - the short term decision he makes will simply expedite or stall the inevitable.

The Telegraph is speaking to the speculation that's been in the market place for basically the better part of August. Lehman's stock has actually acted OK in the last month as a result (see chart). Will Fuld sell to the Korean's, the Chinese, Abu Dhabi, Qatar, or all of the above? Who knows... what I do know is that Fuld has virtually no leverage at the ‘Monopoly’ board dealings because he levered himself up to the gills.

You know how the game of ‘Monopoly’ goes. When you're going under, you sell what you can first - not what you should.

If the stock fails here, we're going to be looking at a fast -23% worth of downside until I see any support.
  • LEH failing to break out through $16.38 is very bearish. Short Term "Trade" downside to $12.37.
    KM
chart courtesy of stockcharts.com