KB Home Reverses Historic Post-Earnings Gain and Delivers A Buying Opportunity

KB Home (KBH) reported earnings last week on January 10, 2018. The reaction the next day was outright startling. The stock gapped up and did not stop rallying until it finished with a 12.3% gain and a new 10 1/2 year high. Source: FreeStockCharts.com I was so taken aback that I checked on the historical … Read more

A Housing Industry Sharply Split On the Impact of Tax Reform

Perhaps it is the pressure of having member companies whose stock trade on public markets. Perhaps it is a coincidental divide in politics. Whatever the explanation, the split in opinion on the impact of Republican tax reform on the housing market became even more stark this week as The National Association of Home Builders (NAHB) … Read more

Toll Brothers on Tax Reform: On Second Thought, No Worries for the Wealthy

In the immediate wake of the details of the Republican plan for tax reform, home builders sold off sharply. While the stock market quickly moved on, the angst in the industry continued. Toll Brothers (TOL) CEO Douglas C. Yearley plainly claimed that the proposal to reduce the cap on the mortgage interest deduction would harm … Read more

California Housing Crisis Means Tri Pointe Is Not Worried About Tax Reform

Tri Pointe Group (TPH) was the last home builder stock I sold as a part of my last cycle of home builder investments. It was also my longest-standing holding; I only exited after the sell-off inspired by the first release of details for tax reform stopped me out of the stock. The stock had a … Read more

Housing Market Review (November, 2017) – A Tax-Driven Day of Angst Transforms Into Another Unrelenting Rally

The last Housing Market Review covered data reported in October, 2017 for September, 2017. At the time, I lamented having too small an exposure to home builders while the entire sector rallied nearly non-stop. I was counting on seasonal patterns to deliver at least one buyable dip ahead of the seasonally strong period starting in … 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 – Lumber Issues Loom Over Another Series of Strong Data (April, 2017)

The last Housing Market Review covered data reported in March, 2017 for February, 2017. At that time, the iShares US Home Construction (ITB) was at the bottom of what turned out to be a very shallow pullback from a near 10-year high. The subsequent recovery has been grinding and slow, but ITB now trades above … Read more

A Stock Market Positioned to Win A Battle of Sentiments: Taxation Versus Economic Optimism

On August 20, 2015, I wrote “A Broad and Bearish Breakdown for the Stock Market” that described a converging set of indicators which flagged short-term bearish conditions in the stock market. The post happened to precede the August, 2015 flash crash by two trading days. It was one of those moments when the technicals worked … Read more

T2108 Update (August 20, 2015) – A Broad and Bearish Breakdown for the Stock Market

(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. It helps to identify extremes in market sentiment that are likely to reverse. To learn more about it, see my T2108 Resource Page. You can follow real-time T2108 commentary on twitter using the #T2108 hashtag. T2108-related trades and other trades are … Read more

Wrangling Over Income Inequality: A Comprehensive Review and Critique of Robert Reich’s Book “Aftershock”

According to “Building a Better America One Wealth Quintile at a Time” by Dan Ariely and Michael I. Norton, Americans are generally misinformed about the true distribution of wealth in America. Robert Reich’s “Aftershock: The Next Economy and America’s Future” represents an insightful and creative approach to educating the reader on income inequality and potential … Read more