Home Builder Stocks Ignore the Calm in the Data – Housing Market Review

Housing Market Intro and Summary The housing market’s comfortable calm continued into September even as the stock prices of home builders raced downward. A general sell-off in the stock market ensnared housing-related stocks. Yet, the housing data reported in September showed little change from the prior month. While home builder stocks ignore the calm in … Read more

D.R. Horton Leads the Home Builder ETF Down to An Important Test

The seasonal trade in home builders continues to unfold more like a typical year. The iShares U.S. Home Construction ETF (ITB) peaked in May on an absolute basis and relative to the S&P 500 (SPY). Since that peak, ITB is down 12.2% while the S&P 500 is UP 3.9%. This gap is so wide that … Read more

Apple’s Big Loss Is the Stock Market’s Loss – The Market Breadth

Stock Market Commentary The weight of deteriorating market breadth was undermining the stock market even as on-going rotations kept the indices floating higher. Last week, the tone made one of those periodic, yet still small, shifts. When news broke that Epic Games won a key provision of its lawsuit against Apple and its Apple Store, … Read more

A Slowing Housing Boom, Not A Crash – Housing Market Review (July, 2021)

Housing Market Intro and Summary “When will the housing market crash?” I hear this question from people astounded by the housing market’s strong performance during the pandemic. The housing market is not heading into a crash anytime soon. Demand remains strong, inventories are scarce, mortgage rates are rock bottom, home buyers are in strong financial … Read more

Weakness Lingers As the Oversold Rebound Cools – The Market Breadth (July 30, 2021)

Stock Market Commentary Welcome to the new world of “The Market Breadth.” I used the switch from AT40 (T2108) to AT50 (MMFI) as my market breadth indicator to improve the name of this blog series. The Market Breadth marks a change from a technical name that sounds like a Space X rocket to an English … Read more

How to Play Catch-Up With the Housing Market

The early 2000s built upon the 1990s momentum for extending home loans to as many people as possible. The drive culminated in the “ownership society” which incentivized the financial system to over-extend credit and fuel a housing bubble. That bubble collapsed spectacularly from 2008 to 2009. In the wake, builders became very wary about building … Read more

The Spring Selling Season Extended Key Downtrends – Housing Market Review (June, 2021)

Housing Market Intro and Summary The housing data for April and now May confirm that the housing market had a kind of false start to the Spring selling season. Normalization continues to pressure short-term trends. Housing starts, new home sales, existing home sales, and home builder sentiment are in key downtrends. These measures are now … Read more

Normalization Places Fresh Pressures on the Spring Selling Season – Housing Market Review (May, 2021)

Housing Market Intro and Summary The Spring selling season looked like it started strong for new home sales. The data for April reveal a story evolving differently. Absolute inventories rose for both existing and new homes and yet sales declined. Housing starts also suffered a setback. Median prices of homes soared, especially for new homes, … Read more

The S&P 500 Broke Down Just As the Stock Market Hit Extremes – Above the 40 (May 12, 2021)

AT40 (T2108) plunged from 59.7% to 38.1% in 3 days for its lowest close in 6 months.

Stock Market Commentary The S&P 500 (SPY) finally broke down and succumbed to the selling pressure building up in the stock market. A “surprise” surge in inflation as measured by the Consumer Price Index (CPI) delivered the headline catalyst for a day of broad-based selling. Given market breadth was already in the process of narrowing, … Read more

A Strong Start to the Spring Selling Season for New Homes – Housing Market Review (April, 2021)

Housing Market Intro and Summary In March, home builder stocks pushed through softening housing data thanks in large part to builder-specific catalysts. In April, a series of strong earnings reports and a healthy rebound in the new homes market combined to propel most housing-related stocks higher still. The contrast between existing and new homes stood … Read more