Homebuilders -

Although not a big fan of mortgage lenders - there is an equity oppertunity in homebuilders.

HGX Homebuilder Index remains attractive based on the bottoming action in the group. Following support level 210 followed by 200.

Analyst on the street remain net/negative on estimates in this group. Certainly, contrarians have placed their bets since July. Moving the index from its lows.


Although, a call that might not be way ahead of the street, current levels still offer attractive upside potential.

Clearly aware that value guys have recognized these oversold condition even in mid- Summer.
Check out the following Analyst ranking on the street:
Buy/hold analyst rating on the street: Still net/negative -allowing for a recovery bounce as a trade.
TOL 5/7
PHM 4/9
HOV 3/6
KBH 3/8

mkt view--

I would also note if a shift in feds message from thr previous meeting than it might have a loud effect - I am sure monday/tuesday- many will shuffle in/out poistions and attempt to decipher beyond fed's action. While equities await for clarity from the 3/5 of companies yet to report earnings.

Based on recent upward move - any confusing or tone change should lead to a favorable oppertunity to short equities and long bond price. (Near-term trade)

What is the current tone that led this revival in markets and defeat on shorts? It is assumed to be soft- landing and low oil and end of geopolotical turbulance. All led to recovery from summer rally and rejected talks of four year cycle.

But steady rides and trends need more substance to justify these overbought levels. A prolonged run from here appeases shorts