Grabbed a small initial parcel when it dropped below $76 today....

Grabbed a small initial parcel when it dropped below $76 today. I expect it to dip lower, but it should hold support at $74 unless it is dragged down by the US/China. CBA will move with the index in this respect, but fundamentally the impact of raising additional capital, risks of a downturn in the housing market and a slowdown in credit growth are well and truly priced in at this point.

Some of the commentary regarding the spike in residential property prices in Sydney/Melbourne is utterly ridiculous and totally ignores the fact that prices in these areas were largely flat for an extended period prior to the surge in recent years. Affordability will put a cap on growth rates sooner or later, but an outright pop is very unlikely. Long-term demand for the limited number of properties that are available in sought after areas, will only move in one direction, fuelled by population growth and a steady pool of foreign buyers waiting in the wings. That part is simple economics.

For those that aren't aware, the shortfall in the institutional offer was bid up to $78 without entitlement to the dividend. The margin for a short trade from here is likely to be pretty narrow and on the whole you are going against those with much deeper pockets.

As always, the best trading opportunities tend to arise when the pessimists start to outweigh the optimists.