Above the 40 (May 11, 2018) – The Stock Market’s Time to Test Buyers’ Resolve

AT40 = 65.3% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 51.5% of stocks are trading above their respective 200DMAs VIX = 12.7 Short-term Trading Call: neutral Commentary Here we are again. The stock market looks like it is breaking free, but there are major caveats which keep me wary … Read more

More Good Deeds Punished: LGI Homes Delivers Solid Earnings and Gets Back A Vicious Fade

Management for LGI Homes (LGIH) set aside an hour for its Q1 2018 earnings conference call. They only needed 37 minutes, including 23 minutes spent on Q&A. Perhaps they should have used the entire hour. Source: FreeStockCharts.com As the chart above shows, LGIH has had a wild two days following its earnings report. The first … Read more

Riding Renewed Market Sentiment, LGI Homes Soars Into A Strong Sales Report

The ink just dried on my last Housing Market Review. In that piece I lamented the on-going lagging performance of home builders and stagnating housing housing data, and thus concluded that it was time to call an end to the seasonal trade on home builders. Just two days later, home builders surged upward in sympathy … Read more

Housing Market Review (March, 2018) – Breakdown Confirmed, Slivers of Remaining Support

The last Housing Market Review covered data reported in February, 2018 for January, 2018. At the time, I connected the dots on the bearish implications of converging technicals and fundamentals. The iShares US Home Construction ETF (ITB) actually managed to hold onto support at its 200-day moving average…until today. So not only is the seasonal … Read more

Housing Market Review (February, 2018) – Stalled and Toppy

The last Housing Market Review covered data reported in January, 2018 for December, 2017. At the time, I described the ominous breakdown of the iShares U.S. Home Construction ETF (ITB), but I was not yet ready to connect the dots on the bearish implications. I am now. ITB has continued its breakdown by first severely … Read more

Housing Market Review (December, 2017) – Seasonal Strength Launches With A Flurry of Activity

The last Housing Market Review covered data reported in November, 2017 for October, 2017. At the time, the iShares U.S. Home Construction ETF (ITB) traded at a 10+ year high with the angst of tax reform left far behind in the rear view mirror. The day after my post, Toll Brothers (TOL) reported earnings that … Read more

Republican Tax Plan Does Not Worry KB Home

The angst may already be fading away. Last week, I chronicled the carnage across the stocks of home builders that erupted in response to the Republican plan for tax reform that includes a reduction in the cap on the mortgage interest deduction. The sell-off that likely had roots in the extreme displeasure emanating from the … Read more

Home Builders Buckle Under Tax Reform – Reviewing the Damage

In my last review of the housing market, I ran out of time to comment on an emphatic statement from the National Association of Home Builders (NAHB) regarding its failure to influence the Republican plan for tax reform. The tax plan coming out of the GOP side of the House of Representatives includes a provision … Read more

Housing Market Review – A Notable Change In Tone (August, 2017)

The last Housing Market Review covered data reported in July, 2017 for June, 2017. The month from there marked a significant change in tone for home builders. The change in tone starts with the iShares U.S. Home Construction ETF (ITB) and its failure to hold support at its 50-day moving average (DMA) for the first … Read more

Housing Market Review – Strong Housing Data Fail to Alleviate Doubts on Home Builders (October, 2016)

The last Housing Market Review covered data reported in September for August, 2016. At that time, iShares US Home Construction (ITB) started a notable divergence from the performance of the S&P 500 (SPY). That divergence widened in October with the S&P 500 losing 1.9% month-to-date and ITB tumbling 6.8%. The selling in ITB has been … Read more