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 and Summary Despite more evidence of slowing conditions in the housing market, home builder stocks remained relatively resilient in August. The underlying dynamics of demand remain in place even as housing prices remain lofty and continue to conjure up images of a housing bubble for market commentators and pundits. A supportive Federal … Read more
The Follow-Through Intro The biggest follow-through trades from “Key Stock Sectors Missed A Breakout In Market Breadth – Above the 40” (June 11, 2021) erupted in the housing-related plays. Big cap tech looks more ready than ever to reestablish its leadership position over the market. The stock market had an initial negative reaction to the … Read more
Stock Market Commentary The stock market struggled for months against the downtrend line on market breadth. The struggle ended last week. My favorite technical indicator of breadth AT40 (T2108) broke out and closed the week at 61.9%. Now I start a countdown toward a test of the overbought threshold. However, several sectors dampened the week’s … Read more
Housing Market Intro and Summary Softening housing data pointed to more normalization in the housing market. Normalization is returning housing data to prior trends and in some cases suggesting important plateaus. Home builder stocks powered through the softening data to show strength in sharp rebounds and fresh all-time highs. The arrival of the Spring selling … Read more
Look no further than LGI Homes (LGIH) as a confirmation that at least some parts of the country are back to business after a temporary pause from COVID-19 (coronavirus) economic woes. Last week, LGI Homes reported more astounding sales results. From the press release: June home closings: +16.7% year-over-year Q2 home closings: +3.1% year-over-year, the … Read more
“Despite the challenging environment we encountered at the end of the first quarter, our business was stronger in April than we had originally expected and we are seeing positive momentum in recent sales trends that leads us to believe the impact from the COVID-19 pandemic may be less severe than we had originally expected. We … Read more
It seems like an eternity has passed since LGI Homes (LGIH) reported yet one more bullish home closings report. For February, LGIH reported a year-over-year increase in home closings of 54.2% and a year-over-year increase of 57.1% in January and February combined. With another home closings report due soon, it looks like the stock market … Read more
This week’s market crash and subsequent sharp rebound revealed some key divergences among housing-related stocks. While one more home builder made it to my “do not touch” list, I see even more opportunities. Opportunities iShares Dow Jones US Home Construction Index Fund ETF (ITB) To start the week, the iShares Dow Jones US Home Construction … Read more
During its earnings call, LGI Homes (LGIH) projected strong performance ahead. The company’s December home closings report delivered. LGI Homes closed 748 homes last month. The 49.6% year-over-year growth contributed to an 18.0% year-over-year overall growth rate in home closings for the first eleven months of 2019. The stock market responded positively by sending LGIH … Read more
LGI Homes (LGIH) released a strong sales report that granted investors in home builders a much needed sigh of relief. On January 7, 2019 (mislabeled as the 4th in the press release), LGIH announced: …an all-time record for home closings during a single month with 884 homes closed in December 2018, representing year-over-year growth of … Read more