ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
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
This is a moment of truth for the stocks of homebuilders. The iShares Dow Jones Home Construction ETF (ITB) last week hit a 21-month high that exactly coincided with a climactic high in January, 2018. The subsequent selling this week seemed to unfold like clockwork. The selling was particularly notable given the S&P 500 (SPY) … Read more
Housing Market Intro/Summary In the March Housing Market Review, I described how the iShares US Home Construction ETF (ITB) was breaking out despite an unimpressive collection of housing data (in the aggregate and trendwise). Last month, I updated my analysis of the seasonal trading strategy for home builders and pointed out the historical tendency for … Read more
Housing Market Intro/Summary The housing data were late and incomplete at the time of original publishing due to the previous U.S. government shutdown. The last update came with the new home sales data published on March 5, 2019. I look forward to everything getting back in sync! The lagging data have not discouraged investors from … Read more
The S&P 500 (SPY) printed its best quarter since the fourth quarter of 2013. While the index gained 7.2% for the third quarter of 2018, home builders went in the exact opposite direction. The iShares US Home Construction ETF (ITB) tumbled 7.4% for Q3 and is now down a whopping 20.9% year-to-date. The selling accelerated … Read more