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 What happened in the housing market in October, 2024? A reckoning that I anticipated finally came in the form of sharply lower prices for the shares of home builders. After resisting rising mortgage rates for a month, the stock market lost its appetite. Earnings have brought a dose of reality … Read more
Housing Market Intro and Summary What happened in the housing market in March, 2024? Home builders grew more positive and greeted the spring selling season with a resurgence in housing starts. In my previous Housing Market Review, I pointed out breakouts in the stocks of homebuilders and a bottoming in existing home sales. Both developments … Read more
Housing Market Intro and Summary What happened in the housing market in February, 2024? Breakouts and bottoms happened. In my previous Housing Market Review, I posited the possibility of a top in the seasonal trade on home builders. In the subsequent month, the stocks of home builders took on new life as investors forgot about … Read more
The bear market intrusion to the oversold period gave way to an explosion of bullish trading action this week. The maximum drawdown of October for the S&P 500 (SPY) was 4.0% well above the average for the month. This extreme move provided the perfect setup for the sharpness of the current oversold bounce. The rubber … Read more
Housing Market Intro and Summary The window for new home sales stealing share from existing home sales may be grinding to an end. Another plunge in sentiment for home builders combined with mortgage rates trending fast and furiously upward toward 8% are exerting more and more friction on the entire housing market. The stocks of … Read more
Housing Market Intro and Summary June’s housing market showed some evidence of slight cooling with the Spring selling season in its late stages. July’s housing data showed a widening divergence in fortunes between an on-going decline in existing single-family home sales and resilient activity for new single-family homes. Enveloping both markets are elevated pricing pressures. … Read more
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
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
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
Overall Assessment I am neutral on M/I Homes (MHO) which means I am content to stay on the sidelines until a fresh catalyst pushes me off the fence. The Q4 earnings report for M/I Homes was relatively straightforward. So I am at a loss to explain why the stock gapped down as much as it … Read more