ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Housing Market Intro/Summary {Note a rough draft of this post was inadvertently posted on January 20, 2020} When I wrote the Housing Market Review for December, I described a “precarious” divergence between the performance of the iShares US Home Construction (ITB) and the S&P 500 (SPY). In late December, dour commentary from JP Morgan (JPM) about … Read more
Housing Market Intro/Summary When I wrote the Housing Market Review for November, the stocks of home builders were on the edge of conquering their moment of truth. The iShares US Home Construction (ITB) soon rolled over and confirmed a breakdown below support at its 50-day moving average (DMA). ITB is now in a precarious position where … Read more
Housing Market Intro/Summary When I wrote the Housing Market Review for October, the stocks of home builders were failing their moment of truth. The iShares US Home Construction (ITB) soon rebounded, including a near picture-perfect test of support at its 50-day moving average (DMA). Last week, ITB actually printed a fresh 21-month high before pulling back. … Read more
Housing Market Intro/Summary The stocks of home builders are starting to fail their moment of truth. A Moment of Truth Looming Ever Larger On October 25th, the iShares Dow Jones Home Construction ETF (ITB) hit a 21-month high that coincided exactly with a major multi-year peak and post-recession high from January, 2018. The sellers showed … Read more
Housing Market Intro/Summary In my last Housing Market Review, I finally conceded to a sustained rally in the stocks of home builders. I noted how this stubborn rally moved counter to unimpressive data. In September, several data points finally came together to support the strong sentiment in financial markets. Low interest rates dominate the story … Read more
Housing Market Intro/Summary In the last Housing Market Review, I discussed my slow and reluctant acceptance of a stock market that was effectively front-running the seasonally strong period for the stocks of home builders (starting in October/November). I also showed the near consistent dichotomy between builders excelling at selling lower-priced homes to buyers trying to … Read more
Housing Market Intro/Summary In the last Housing Market Review, I pointed out how the stocks of home builders were still making a surprising push against the expected seasonal top in their shares. Yet, I still expected iShares US Home Construction ETF (ITB) to remain constrained to a pivot around its 50-day moving average (DMA). Soon … Read more
My wait for an entry point to buy Lennar (LEN) continues. On a day with multiple warning signs about the U.S. economy from companies like Csx Corp (CSX), the Census Bureau piled on with lukewarm data on housing starts. While single-family housing starts for June increased month-over-month by 3.5% to 847,000, housing starts decreased on … Read more
Housing Market Intro/Summary After writing the last Housing Market Review, I was convinced a triple top had appeared in the iShares US Home Construction ETF (ITB). The May sell-off in the stock market pushed ITB into a breakdown below its 50-day moving average (DMA). Immediately after that post, ITB rebounded right through its 50DMA and … Read more
Housing Market Intro/Summary In several posts on the housing market, I made the case for a top in the stocks of home builders and pointed out the parallel weaknesses in the housing data. Last week, the iShares US Home Construction ETF (ITB) appeared to confirm what looks like a triple top in the index. Not … Read more