Sunday, September 18, 2022

US Home Construction Review $ITB #HomeBuilders

US Home Cons Review
Trading noise, the random movement of price over the short term, does not control trends, cycles, and profits. The majority, an emotionally driven group focused solely on price, often interprets it as meaningful information. This leads to confusion, frustration, missed opportunities, and leaves the majority as the bag holders of trend transitions. The Evolution of the Trade helps investors stand separate from the majority.

The US Home Construction's overall trend, revealed by trends of price, leverage, and time, are defined in The Matrix for subscribers.

Subscriber Comments

The Series 1 Economy & Stock Report 10/20/21, a series of videos and updates, extends the discussion.

The Internet is a great source of opinion. Few people do their homework, and most let their belief structures influence their interpretations.

One of the favorite belief of the permabears is rising rates are bad for stocks, and rising mortgage rates will be bad for home builders. The last 30 years has trained the public to assuming rising rates will be bad for everything. A quick spin on FinTwit reinforces this belief structure (see Tweet Below). Maybe someone should ask, or research if the invisible hand responds to this belief rather than positioning as an economic law. If not, the majority setting up to be played like the fool and bag holder. It's easy to be a bag holder - have strong opinions, don't do your homework, and never adapt when price move against your position.

FinTwit Tweet

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This is an open review. Please share and track the invisible hand through the Matrix, Reviews and Reports, and ignore ego-driven opinions. #stocks #interestrates #economy #gold #OATT #OOTT

We've shown this charts before. Rising rates are not a death sentence for stocks. Fears sells, but the invisible hand, the only opinion that matters, is not listening. The following charts clearly show that stocks perform quite well when rates are rising (see Interest Rates and Stocks).

Interest Rates and Stocks 1850-1950

Interest Rates and Stocks 1900-Present

Oh but, home builders/construction will be crushed as rates rise, says FinTwit. The correlation between stock prices and home builders is 0.92 since 1960 (see Interest Rates & Home Builders. The invisible hand always finds a way to protect itself. Just because Joe six pack can't afford mortgages on their McMansions doesn't mean housing will collapse. Cash rather than financing and smaller homes emerge as interest rates rise. Don't let FinTwit play you for the fool.

Interest Rates Stocks & Home Builders

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The Matrix provides market-driven trend, cycles, and intermarket analysis.