“KB Home shares jump on third quarter earnings” – such is the kind of quick trigger post earnings headline that consistently fails for home builders. KB Home (KBH) opened higher by 5.7% but was all downhill from there. At the close, KBH lost 3.1% on the day in a major reversal. This close was a vast improvement on a loss which reached 6.4% at the intraday low....
"Existing home sales continue to weaken and new home sales are not doing enough. Affordability issues are looming larger over the market." Housing Market Review (August, 2018) - Worsening Affordability Issues Add to Weakening Data drduru.com
"Toll Brothers finally got a strong post-earnings response and cut through some housing jitters. Still, the message has not changed." Toll Brothers: Strong Financials, Buybacks...and Housing Jitters drduru.com $TOL #housingwatch
Alongside bearish trading action in builder stocks, July’s housing market data may have delivered confirmation of persistent investor fears. "Housing Market Review – A Wobbly Edifice As Builders Break Down And Data Weaken" drduru.com $ITB $DHI $MTH $KBH $PHM $TOL $TPH #housingmarket #housingwatch #homebuilders #stockmarket #economy #gdp
So with the FED hiking rates another .25 bps in June (96% odds as of right now) I am making a bearish trade in the home builder ETF. I have never traded through a rising rate environment so.......take it with a grain of salt. I am buying the 40 put in October and selling the 36 put in October for $1.12 This is a defined risk trade for a debit (not really the...
A poor reaction to a hawkish Fed ended the overbought period at 2 days. The S&P 500 is now poised for a pullback. A Fed Buzzkill Ends Ambitions for An Overbought Market drduru.com $SPY $QQQ #VIX #T2108 #AT40 $ITB $LEN $AAPL $TLT $DXY #forex
Housing Market Review (May, 2018) - A Fresh Flicker of Life As Sentiment Turns Without A Change in Data. The housing data continue to plod along but the market for home builder stocks is suddenly warming up all over again. drduru.com $ITB $CCS $DHI $PHM $LEN $FPH $LGIH $MTH $XHB
Home builder stocks are starting to diverge as housing data decelerates. Investors are showing interesting preferences even as all builders continue to tell similar stories. For more.... Housing Market Review (April, 2018) - Dissonance: Decelerating Housing Data and Diverging Home Builder Stocks drduru.com $ITB $PHM $LEN $KBH #housingwatch #stockmarket
We will see if we have a case to short ITB by end of year or early next spring.
It broke both blue supports this week. Red support may come into play next week. Also it might work on its right shoulder.
It falling out of its rising wedge with RSI diverging for quite some time. Might be a short candidate but we will wait a little longer for assurance (housing sector). Note RSI falling off and a negative MACD.
The On Balance Volume indicates that there is strong buying pressure relatively recently. Further, the MACD and RSI are in optimal range for a breakout. Notice the consolidation of volatility and an increasing slope of higher lows to form somewhat of a wedge pattern. Finally, the fundamentals indicate strong confidence in housing, for the first time in years.
It quietly lost 3 support lines. and I think it is targeting the blue support line ($23 level), that is about 10% drop from current level.
ITB has been off my radar for quite some time and recent strength caught my attention (hopefully not too late). On the month, it run into double resistance and we will see how it will close its book at month end. Note that RSI is working on a breakout, and MACD is positive. Both RSI and MACD are still diverging from price. If RSI and MACD are not weakening into...
Earlier this month, the idea of lumber being a signal for economic data was brought to the table (here). Lumber is not necessarily a trader’s first go-to for evaluating economic forecasts, but there is a striking resemblance in trend for lumber and the ISM manufacturing PMI data. As lumber prices dive, manufacturing data tends to do the same (and vice versa)....
10 weeks MA is pointing down, and it did not close above this MA. MACD turned negative. RSI is in the upper range of the downward channel. Overall impression is it has more to the down side.
Unless red resistance(s) get cleared, there is no case to long ITB. But a trading range seems to be there. Sell long position If blue support breaks.
STRONG buy if it breaks out on the monthly chart (on a monthly close). RSI and MACD still have to do some catch up. May retest pink line.