2 Setups In The Housing Sector

• August 17, 2004
• Tim Truebenbach

The
market remains in a tough spot.  Fortunately, this is a necessary
step before the market can move higher later this year or early next year. 

 

 

We continue to see light volume
as the market advances.  This is an indication that the rally is weak or not
representing many buyers.  AS prices increase, sellers will have more incentive
to unload stock and drive things lower.  We have also seeing higher volume in
the market’s recent declines.

Even though this rally looks
weak as a whole, there are some set-ups from the housing sector that have poked
their heads up.  Pulte Homes (PHM) broke out a couple of days ago.  The
stock may not get far with the weight of the market, but is interesting to
watch.

 

 

Accredited Lenders
(LEND) has been carving out a double bottom base with a pivot point at 40.18. 
With low interest rates, the housing and mortgage market have remained very
strong.

 

 

This market remains treacherous
to play in and the best thing to do right now is probably just sit it out on the
sidelines.  If we get an abnormal spike higher, aggressive players may even wish
to consider shorting lagging ETF’s such as the QQQ’s or SMH’s.

Tim Truebenbach