9 replies to this topic

[A-ha]

After missing NFI that I was so close to shorting.... Now homebuilders are getting legs on the downside. And I saw this coming a few days ago ... I promised myself not to miss it. So I will be shorting any strength. CTX TOL MTH MDC DHI BZH There is no bull side or bear side but right side ...

Edited by xD&Cox, 22 February 2007 - 03:42 PM.

[hiker]

Strazzini just now commented on the sector at CNBC

[A-ha]

Bullish or bearish? Hope it is bullish. This sector feels like Oil Services... Too much buyers and hoppers.

[greenie]

CTX TOL MTH MDC DHI BZH

There is no bull side or bear side but right side ...

HOV ?

[A-ha]

HOv is not in my chart archive. It is probably not showing some tape or trend but HOV should go with the rest of course.

[hiker]

xD...just heard his final sector comments...I think he said to sell if not a long-term investor..his final stmnt

Edited by hiker, 22 February 2007 - 03:55 PM.

[eminimee]

http://stockcharts.com/c-sc/sc?s=$HGX&p=W&yr=5&mn=0&dy=0&i=p27434630753&a=95450372&r=6192.png

[arbman]

Teaparty, it needs to break above the line to be a inverted H&S candidate when it pulls back, if it breaks right here, I think it is more like a H&S break down --Q1'04 would be the left shoulder, the entire 2005 is the head and this latest rally is the right shoulder... I think by the time the rates come down, the industry will have more cut backs in building to do and even if the home prices stabilize and bounce into 2008, the group's earnings will have some significant trimming first... The rates can not come down before the economy slows down, otherwise the dollar will definitely crash and the slow down means more housing problems... Yet, the markets have not deplete their buying power yet, even though the liquidity is drying, there is still a ton of liquidity in the system... - kisa

[jawndissedi]

What you have seen in the housing sector is a very great, once-in-a-lifetime mania. Consider the sentiment revealed in the following excerpt from today's New York Times (emphasis added by me):

It was a simple pitch: Investors would put little to no money down and take out construction loans that a developer would use to build modest homes in a fast-growing stretch of Southwest Florida. When finished, the homes would be flipped for tidy profits of $30,000 to $40,000 apiece.

Too simple, perhaps.

Nearly two years since the developer started marketing the investment plan nationwide, work on the homes has come to a halt, leaving 482 investors with half-built houses and thousands of dollars in construction liens. Coast Financial Holdings, which owns the bank that made the loans, has disclosed that $110 million, or a fifth of its total loan portfolio, could be troubled. Its shares have fallen 46.5 percent so far this year, and banking regulators are investigating.

“It was strictly a passive investment,” said Paul Matera, a retired contractor from West Islip, N.Y., who signed up for two houses and introduced dozens of others to the plan.

“You didn’t pick out the model of the house. You didn’t pick out the exact location. Everybody signed papers without reading what they were signing.”

During the housing boom that ended in 2005, money poured into real estate from investors ranging from the ultrarich to middle-class professionals like doctors, teachers and midlevel managers. Places like Florida, the Southwest and the West Coast were the biggest recipients of the investment wave because housing there was often deemed a sure bet.

The case of a relatively small development in Southwest Florida illustrates the important role that real estate investors played. Like the day traders who drove up Internet stocks in the late 1990s, these investors, aided by cheap mortgages, helped drive a housing boom over the edge.

“It was a groundswell,” said Jerry Manning, who runs J. J. Manning Auctioneers, which sells homes in the Northeast and in South Florida. “Everybody thought that they were going to be a real estate mogul.”

Full story

[A-ha]

I still nearly exclude the collapse of this bubble from my apocalyptic scenario for S&P500. At the moment, I will not think about it but just short housing stocks on any strength. Because if I think about it, I will sound like an insane.