ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
During its earnings call, LGI Homes (LGIH) projected strong performance ahead. The company’s December home closings report delivered. LGI Homes closed 748 homes last month. The 49.6% year-over-year growth contributed to an 18.0% year-over-year overall growth rate in home closings for the first eleven months of 2019. The stock market responded positively by sending LGIH … Read more
Overall Assessment The stocks of home builders have had a banner year. The failure of the iShares Dow Jones Home Construction ETF (ITB) right at the climactic high of January, 2018 exposed a change in sentiment at an important juncture. So far, M.D.C Holdings (MDC) has suffered one of the most damaging changes in sentiment. MDC … Read more
Overall Assessment I want to be bullish on Century Communities (CCS). Century Communities sports a recession-level valuation and a strong top-line growth profile. The company’s business model is solidly planted in the entry-level and lower-priced homes that are prime drivers of the current housing market. However, a negative cash balance, negative earnings growth (over the … Read more
The Timing and the Stock Charts During the analyst conference call explaining the deal to buy William Lyon Homes (WLH), CEO Sheryl Palmer revealed that Taylor Morrison Home Company (TMHC) began buy-out talks several months ago. That was a time of rising optimism for home builders. The announcement of the deal came shortly after investors … Read more
AT40 = 57.4% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 54.9% of stocks are trading above their respective 200DMAsVIX = 12.1Short-term Trading Call: neutral Stock Market Commentary The stock market seems to be on a slow and steady march toward Christmas. The current bearish divergence and an exceptionally low volatility … Read more