ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
At the end of 2015, I wrote about the critical tests facing LGI Homes (LGIH). After another strong monthly closing report, LGIH seems more likely to pass the test of financial performance in coming earnings reports, but the technical test remains in place. LGIH reported record results for a single month in December, 2015: 433 … Read more
The housing market is moving in slow motion. The recovery is in place but locked into low gear. Until conditions change materially, it makes sense to place my coverage of the overall housing market into a monthly cadence. The reporting loses a bit of timeliness, but it should gain more cohesiveness with more connected dots. … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on December 29, 2015. Click here to read the entire piece.) In mid-September, I wrote “LGI Homes Is Now A Bit Hot To The Touch.” LGI Homes (LGIH) is down 18% since then. LGIH also hit an all-time high on December 1st … Read more
Single-family new home sales began the year with a bang. Sales for January and February soared year-over-year and continued the post-recession breakout that occurred in December, 2014. Sales have trickled downward ever since. Source: US. Bureau of the Census, New One Family Houses Sold: United States [HSN1F], retrieved from FRED, Federal Reserve Bank of St. … Read more
While I have been talking up warnings on the deterioration in the underlying technicals of the S&P 500 (SPY), I continue to like the relative performance of iShares US Home Construction (ITB). Source: FreeStockCharts.com ITB is up 9.2% for the year while the S&P 500 is essentially flat year-to-date with a 0.3% gain. One of … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on August 27, 2015. Click here to read the entire piece.) Toll Brothers (TOL) had the misfortune of reporting its third quarter 2015 earnings in the middle of a severe market sell-off. {snip} Source: FreeStockCharts.com The selling in TOL plunged the stock … Read more
(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. It helps to identify extremes in market sentiment that are likely to reverse. To learn more about it, see my T2108 Resource Page. You can follow real-time T2108 commentary on twitter using the #T2108 hashtag. T2108-related trades and other trades are … Read more
Century Communities, Inc. (CCS) reported third quarter earnings on the evening of November 5th at the tail-end of a particularly challenging time for the stock. Going into earnings, CCS was down 35% from its 52-week and all-time closing high set in early September. CCS is still up 7.5% for the year, but the recent earnings … Read more
How easy it is to forget the bullishness that homebuilders have for the future. The Census Bureau reported disappointing new home sales data for September, 2015. The negative feel was further underlined by “consensus expectations” which turned out far too high. Single-family new home sales dropped 11% month-over-month. That SEEMS awful until you read further … Read more
Sentiment among homebuilders has been riding high. This month, the sentiment of homebuilders reached heights last seen during the bubble days. Builders have backed up this optimism with housing starts at post-recession highs. While these starts are STILL at levels considered recessionary in previous housing cycles, the trend continues to march upward and bullishly. There … Read more