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Author Topic: Trending Homebuilder stocks.... DOWN
Free Muney
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Ok so housing market is in the crapper, fed just lowered interest rates, but after an early pop today, homebuilder stocks are falling again after their bounce from today and yesterday . DHI
in particular is one i am shorting currently, economists are calling for a 2 year continued slum in the housing market. Anyone feel differently or agree that this seems to be the safest bet in the market right now?

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Contrarian views always appreciated.... :p

Posts: 361 | From: Portland, Oregon | Registered: Jun 2006  |  IP: Logged | Report this post to a Moderator
glassman
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i don't like shorting...

"the builders" have 5 years of inventory on hand for land to build on...

Analysis for the Housing Market
By:Ken Lee

Existing home inventories balloned to all-time high levels in July. Inventory of existing homes jumped 5.1% to a preliminary 4.592 million units from a revised 4.368 million units in June. July’s level is 18.9% higher than the 3.861 million units of inventory one year earlier. At the current sales pace, there is 9.6 months of supply of existing homes on the market. That is the largest months of supply since September 1991.



it's prolly a safe play... just remeber that the last two days of UP on the DOW was shrotcovering due to the FED cutting by 50 basis points instead of a quarter%....

going long OIL is safer... oil will be hitting 100$ soon, also cuz the the FED lowered, the USD$ will drop on the world market and that will raise oil prices, and that's just based on todays news.. if Israel or US "hits" Iran? we will see $150 in no time...

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Don't envy the happiness of those who live in a fool's paradise.

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Upside
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I hope you're right Glass. It'll only serve to hasten our decline of foreign oil dependence. The only real way to break it is to force the issue. I don't agree with you though, even though the OPEC increase in production is seen as too little too late, I'm a contrarian when it comes to oil prices. Assuming relative stability, I'm guessing that 50 bucks a barrel isn't out of the question.

As far as shorting the housing market goes? Probably safe through the winter at minimum. Housing has been on such a roll for many, many years so it's been long overdue for a downturn. The question is where are we in the cycle. Come next spring if we have a stable economy you could see a pretty serious upswing.

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Free Muney
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thanks for the feed back, I've been looking to get into exxon. unless you know of a better oil stock.

as far as shorting is concerned... I deceided it is much easier to find the plethra of KRAP stocks and find a solid down trend. than it is to find the one or 2 golden picks that are going to rise forever.
especially from a short term stand point.

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Contrarian views always appreciated.... :p

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RagingBull
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FTK heading towards 60 i waiting for an entry point here
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Free Muney
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So the stocks that I have been playing with...namely DHI, SPF, PHM, and KBH are all moving in similar patterns. They each bounced up off the lower bollinger bands to just below the upper band and are now as of today moving back down(except spf who is suffering more than others because of canceling their dividend). With housing outlook still negative, and talks of people struggling to get loans approved still. this should be an easy 20% shorting play once again in a matter of a weeks time.

If anyone agrees or disagrees please explain. Thanks!

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Contrarian views always appreciated.... :p

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Free Muney
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notice in particular rsi dropping immidately after crossing the 50
3rd time just on this chart. also Williams and macd are confirming. DHI Stockcharts.com trend

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Contrarian views always appreciated.... :p

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Free Muney
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humph, i am getting ran over buy bulls..... *trample* *trample*

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Free Muney
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here is a working link for DHI
http://stockcharts.com/h-sc/ui?s=DHI&p=D&yr=0&mn=6&dy=0&id=p50180018807

i still think this is a great play. monday will tell. kind of looked like this sector was basing this week. but today housing was all Red. crashed thru 50 rsi. djia is looking toppy. [Roll Eyes]

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Contrarian views always appreciated.... :p

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glassman
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quote:
Originally posted by Free Muney:
humph, i am getting ran over buy bulls..... *trample* *trample*

the market seems to be just plain ignoring fundamentals for now...
the longer they ignore fundamentals? the more damage the fundamentals will do when they finally hit home... [Roll Eyes]

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Free Muney
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more bad news for housing, dhi released some bad numbers today. heres a blip from msn:
"D.R. Horton, Inc. DHI, America's Builder, the largest homebuilder in the United States, Tuesday (October 16, 2007), reported net sales orders for the fourth quarter ended September 30, 2007 of 6,374 homes ($1.3 billion), compared to 10,430 homes ($2.5 billion) for the same quarter of fiscal year 2006. Net sales orders for fiscal year 2007 totaled 33,687 homes ($8.2 billion), compared to 51,980 homes ($13.9 billion) for fiscal year 2006. The Company's cancellation rate (sales orders cancelled divided by gross sales orders) for the fourth quarter of fiscal 2007 was 48%.

Donald R. Horton, Chairman of the Board, said, "Market conditions for new home sales declined in our September quarter as inventory levels of both new and existing homes remained high while pricing remained very competitive. We also experienced reduced mortgage availability due to tighter lending standards, and buyers continued to approach the home buying decision cautiously. We expect the housing environment to remain challenging.

"We continue to focus on reducing inventory, generating cash flow and reducing outstanding debt. We significantly reduced our homes under construction during the fourth quarter, which contributed to achieving our cash flow from operations goal of $1 billion for the fiscal year."

The Company will release its fourth quarter results on November 20, 2007 before the market opens. The conference call will be held Tuesday, November 20, 2007 at 10:00 a.m. Eastern Standard Time (EST). The dial-in number is 800-374-9096. Participants are encouraged to call in five minutes before the call begins (9:55 a.m. EST). Please reference the call host, Donald J. Tomnitz, CEO of D.R. Horton, Inc. The call will also be webcast from the Company's website at www.drhorton.com on the "Investor Relations" page.

During the fourth quarter, the Company aligned its external reporting regions with changes in its internal reporting regions. The new Midwest region includes the following markets: Denver, Chicago and Minneapolis. Denver was previously reported in our Southwest region and Chicago and Minneapolis were previously reported in our Northeast region. The changes in reporting regions have no effect on the Company's consolidated financial position, results of operations or cash flows for the periods presented.

D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 83 markets in 27 states in the Northeast, Midwest, Southeast, South Central, Southwest, California and West regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $90,000 to over $900,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries."

lots of cancellations, bad numbers, easy ride down 20+ percent. into november when it releases its financials.

additionally, the charts for this stock is are very predictable, consistiently bouncing off bollinger bands.
I know everyone on this board likes crazy a$$ gambles in pennies. But this is a safer play for consistiently growing principal capital.

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Contrarian views always appreciated.... :p

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JLo
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The housing situation will take some time to work out. It will take more Fed rate cuts and series of positive rebound reports to build a bottom. I have been shorting KBH for months now. Wish I had shorted LEN, BZH and others.

Kind of related, what you think of the mortgage banks like CFC,WM and mortgage reinsurers like MBI,MTG ?

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Free Muney
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i shorted citi, its working out. I wish i shorted phm last week, 20+ percent in 1 week drop. banks are feeling a delayed effect of the housing shakeout. so now they are starting to return the bad news as well. citi, one of the biggest is planning layoffs. others will follow the bad news.

on a sour note, imo the overall market will be red as well if financial sector starts taking a beating. shorting might be the safest play for awhile....

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Contrarian views always appreciated.... :p

Posts: 361 | From: Portland, Oregon | Registered: Jun 2006  |  IP: Logged | Report this post to a Moderator
   

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