Duru wanted me to post some “good news” charts and requested some housing stocks like HOV, PHM or KBH. The housing sector has had an amazing run for the last few years. The Housing Index (HGX), has doubled since January 2003 while PHM is up 175% over that same period. Many have tried to call a top in this sector but it just keeps powering higher. HGX and PHM both closed at new all-time highs on Friday and it’s hard to find anything wrong with the price charts. But there are some signs of weakness in a few indicators. I won’t be so bold as to call an end to the run but I wouldn’t be surprised to see this move to hew highs fail. If it does fail and 60 subsequently breaks things could get interesting.
P.S. I’m glad that people are enjoying these charts. I’ve got a few more in my inbox now so look for them over the weekend.
Also interesting to note how little the Fed’s “warning” to start 2005 mattered to the housing stocks. While the rest of the market swooned, housing just rested and re-launched. Count on Mike to douse the flames with talk of bearish divergences…