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 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
While the market was going wild buying call options in Toll Brothers (TOL), insiders were selling large quantities of shares. SEC filings reveal almost $2.8M in share sales. Here is a summary with emphasis on the CEO and President (note I mainly care about the sales transactions of C-level executives and SVPs and not board … Read more
The Pairs Trade Exactly one month ago, I pointed to a pairs trade using put options in Toll Brothers (TOL) and call options on the iShares Dow Jones Home Construction ETF (ITB). Home builders selling affordable and otherwise lower-priced homes were rapidly gaining favor. Toll Brothers, a builder of luxury, high-end homes, was greatly under-performing … 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
While the month of August was full of sharp trading action which left the S&P 500 (SPY) trapped in a trading range, home builders emerged stronger. The 4.8% August gain for iShares Dow Jones Home Construction ETF (ITB) far out-performed the S&P 500 (SPY) which languished with a 1.8% loss. Ironically, the stock market’s small … Read more