I was a bit early with my expectation for when the homebuilder stocks would rollover again. But, then again, I underestimated the willingness of the Fed to keep the S&P 500 from falling.
HOWEVER, after hitting a high of 540 eight trading days ago, the DJUSHB appears to have rolled over. It closed down 4 points today at 527, 2.4% below its high a week and a half ago. In the same time period, the S&P 500 has actually risen a few points. The DJUSHB bottomed out and started higher in October a couple days before the SPX bottomed and headed up in “V” fashion. I believe the homebuilders are going to sell off before the Fed lets the stock market drop again.
My latest homebuilder features a company that I believe will eventually end up filing for bankruptcy. It would have had to file probably sometime in 2011 had the Fed not saved the entire homebuilder stock sector with its QE program. Interestingly, this stock – using a monthly graph which I show in the report – has stayed at roughly the same trading level since early summer 2013. I have stated many times that the housing market mini-bubble peaked in July 2013.
I believe this is my most well-written and documented homebuilder report. A recent buyer of my last homebuilder report sent me this email just this morning: “Thank you for the report. Knock on wood…it has been profitable for me right out of the gate.”
You can access my latest report here: Homebuilder Stock Reports.
This particular company has more than 4x the amount of debt per unit home sold that it had in 2005. It also uses extremely misleading accounting, as I detail in my report. In fact, I show how the Company, in reality, has now lost money 7 years in a row, despite its proud announcement that 2014 was its first profitable year since 2007. You can also access this report by clicking on the pic below:
I include a section which offers advise on trading/shorting the homebuilders. I also include a section on using options, with some specific call/put recommendations. This report is unlike any you’ll find published by Wall Street or subscription research services. It is much higher quality and very candid.