XHB
[[XHB]]
Wanted to short the home builders, but the broker doesn’t have any shares to borrow. This is the first time I came across this.
[[FSLR]] is finally dropping, after causing me several sleepless nights a couple of months back. I missed the drop.
Regarding XHB:
From the NCN network
Finally this homebuilder rally (XHB up 6% YTD) is making sense.
A buddy I know who is a seasoned real estate veteran says the down payment assistance program is creating quite a sense of urgency. BUT it expires on 10/1/2008. Consumer awareness that this program is going away in less than 30 days is causing alot of buyers to get in and get in NOW… They are pulling out all the stops to get these deals done. But outside of that… there really isn’t any other demand in the pipeline.
I read an article recently that talked about the fact that 75% of the new home buyers in the Phoenix area are using this down payment assistance.
This is causing alot of current demand that is being mistaken for the real turn in real estate. Beware, because after Oct 1st… this demand will evaporate and the real decline will start, and it will be sharp. It wouldn’t be outside the realm of possibility to see sales fall off a cliff this fall.
As anecdotal home sales data is being released over the next 30days the news will be good and the builders will likely go higher, and cramer can declare victory… so don’t try to fight this… YET.
Ah-ha! great, thanks a bunch.
It will pay to wait for this one.
There are dozens of ETFs for shorting across the markets, without any borrowing.
Just do trade right bad/good news 🙂
Hi R.,
I trade inverse ETFs, but if you’ve been following my blog for the last month or so, I’m trying to slowly get away from that. They’re perfect for day-trades, of course, but I wouldn’t sleep well holding an inverse ETF, especially ultra, for more than a week at a time. The “leak rate” is just too high.
That’s why I’m shorting UYG and not buying SKF right now. It’s essentially the same thing, but UYG is slightly less volatile and both eventually go down, because of the expense ratio. Check this out: chart.
So just as with SKF/UYG, I would prefer to short the long XHB.
Same with China and commercial real estate – I dabbled with FXP and SRS, but from now on will short FXI and IYR/URE instead.
Btw, I don’t know what the inverse of XHB is, couldn’t find it. Any ideas?
My bad, my bad 🙂
May be the next portion of links will answer partly to that dilemma:
http://seekingalpha.com/article/63430-can-t-short-xhb-create-your-own-homebuilders-etf-to-short
http://www.etfzone.com/?template=viewarticle&article_id=864
http://www.financialsense.com/fsu/editorials/gorton/2008/0818.html
You know, you have to build portfolio wich including 3-4 different and allocated parts,
only one of them can be separated for the intraday trading and pipsing…
Re: XHB
That’s pretty interesting. I’d probably concentrate on just 2-3 builders from that list. Even with $4.95 per trade commissions, they still add up.
I think the markets will continue going down for a while longer, so why would I buy anything at this point? I like my allocation – liquid cash and trading money. Not in the mood to invest for the long-term just yet.
What’s your take on the U.S. dollar?
I should expand on my position in regards to the long-term investing:
– they always say that you should only invest for the long-term the money you won’t need in the next 5 or 10 years. I simply can’t commit any significant amount yet, because of certain plans, and I only trade with the money we can afford to lose without any impact on our lifestyle.
So far I can tell you that I have gotten a return on this play money that by far exceeds anything I could’ve made by investing it.
– as I mentioned earlier, I do not rule out a deflation.
R., thanks for the dollar article. Is this your opinion on the US dollar as well?
You’re welcome 🙂
The situation is pretty much difficult and complicated right now for the ‘oneway’ opinions.
In addition to the last Fannie&Freddy’s turmoil, we have some rumors about Israeli airstrike attacks on Iranian nuclear facilities in September or October 2008…