Man, today was one UGLY market. The worst day for momentum and general sentiment I've seen in a long time. Point drops weren't all that scary and there was a small rally at the end, but it was just the general "feel" of things. A lot of times that signals the end of a bull market pullback, but this had a different kind of "panick right below the surface" quality to it than the typical summer malaise trade downs.
I read your article and I've seen a dozen more like it. Not to dismiss the good information contained within. It's just that without those articles and the general negative sentiment continuing after earnings have made a dramatic turn around, we'd never have any indicators pointing toward whether a bottom had been reached or not until we were in the midst of a full blown recovery. By that time, it would be way too late to buy in on a truly worthwhile profitable trade. You may have noticed I'm a Buffetite..."blood in the streets..." and all that. Despite the fact the government gets so much wrong, the cessation of the tax credit was based on improving numbers in the housing market. The facts just can't be argued. But if we do slip back into a double dip and I'm wrong, there's better than a 50/50 shot in an election year we'll see Congress lift the credit back up on the table within weeks...not months. And while that might not equate to a rally, it will certainly stem any arterial bleeding.
In 30 years I've never seen Joe Sixpack and the press figure out what's going on in the housing sector until the call is a no brainer. Never. The only people with a worse track record than the government at calling the market are the business press and analysts. (If you need evidence, just go back and read some of the thousands of "....this tech rally will never end, you need to take a second on the house and get in NOW!" articles in December of 1999 just prior to the 2000 crash...they're hilarious) I seriously believe the press starts grading their own test papers and fixing the game by upping the drama queen aspects of their own reporting near the very beginnings of recoverys and long term bear markets so despite the preponderance of good or bad numbers, it still doesn't appear they missed the call. Until its too late of course. As I said earlier, it will be fall before the general populace grudgingly begins to accept housing has turned and probably next spring before they open their wallets and act on it. But I still like the odds for an August/Sept rally in LEN from the smart money influx. Provided of course I don't get stopped out of my trade by the lemmings in the meantime...all IMHO.
SBB
