Friday, December 7, 2007

Home Builders




On December 4th I bought a small position in ITB, the Home Builders ETF. Well its up 16% since then, too much too fast who know, look at the chart, its breaking out. I know whole home building and construction industry in the US is in a recession, and everyone knows it. But you make money when no one wants to buy. That may be ending.

Posted by prudentstockinvestor M.D. at 11:55 AM

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About Me: Disclaimer

$BPCOMP

$BPCOMP
Extremely Oversold

Regarding Chart: BPCOMQ

This is the lowest close seen in years, usually a sharp and violent rally follows these moves enhanced by short covering, this is no time to short and start making a shopping list.

Bear-ly Hangin" In dustrials

Bear-ly Hangin" In dustrials
Dow Graph: 11/20/07
The Dow looks like its fighting for its life here at the level. It's no surprise there was a vicious bounce off the trend line as shown in the chart. Unfortunately, the last time we had that five hundred point reversal day was caused by the Fed stepping in, there has to be a similar event that helps the market or there is more pain ahead. The Fed minutes said nothing the market really liked, we sold off hard and bounced back hard as we hit support. This was just a reflex rally we may have to get one more really painful selloff to get around 12500.