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Plunging Home Sales: The Latest Example Of Why Technical Analysis Trumps Media Scumbags

Posted by timothysykes on Fri 25th of Apr, 2008 02:44:58 PM
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Home sales are plunging, 13%+ annual drop, largest since 1970, it’s gonna be another depression, we’re all gonna die—blehhhhhh! Who cares? Yeah you heard me—let the flippers suffer/go bankrupt/in debt, that’s what they get for their utter disregard of historical research and for listening to big talkers like Donald Trump who love to un/knowingly risk disaster.

Traders and investors who rely on the one true thing in finance—the charts—know better; the biggest homebuilders stocks (LEN), (KBH), and (TOL) are all slightly higher since this “disastrous” news broke and their charts have been bottoming for weeks. The overall market is up big over the past two days and it’s not because the stock market is some random uber-mysterious thing.

cnbc Plunging Home Sales: The Latest Example Of Why Technical Analysis Trumps Media Scumbags

It’s because as much as financial media circus loves talking panic—it helps ratings—all this bad news is already priced in. That’s the beautiful thing about the stock market, it doesn’t care about media scumbags and their ratings-hungry outlets, nor does it bother reading the attention-grabbing headlines—only expectations matter. That’s right kiddies, it’s not that complicated—you just have to be aware of all the industry BS–my telling you this probly means I’ll never get to bring female models on CNBC again :(, but sometimes you gotta make sacrifices for the greater good.

Sure, expectations on individual stocks can be manipulated by the media and promoter scumbags, but not on macro issues—there’s just too many smart people who’ve learned how the game works. After all, the talking heads all put together ain’t worth more than a three-dollar bill because the market don’t give a damn about guesswork.

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  • JMo
    What do you think about PAL as a short term buy?
  • JMo since when does Tim invest short term?
  • ILoveTheForums
    Dosnt Tim have a forum for these types of questions?
  • AP
    Homebuilders have been forming a nice base, but I wouldn't call it a bottom. How do you call a bottom on an industry that didn't really even exist 10 years ago (you know back before the banks gave away homes to anybody with a pulse)?

    As soon as one of these big builders announce bankrupcy the whole group is going to take its next leg down on it's long term down trend.
  • Agreed, this is the softest market in 30 years and it's not getting any better. A 3br, 2ba 1500 sf house right next door to me is for sale for $715k. All those jokers who bought with ARMs and Interest only loans deserve their pain.
  • Bob
    Tim,

    I agree. You are smart and people who talk shit on you are either ignorant or stupid. I was skeptical at first due to ET trash, however I have to give you full props on your stock market knowledge and your commitment to helping people out and answering their questions. Now, I give more credence to what you have to say over the fuck-faces at CNBC - Kneale, Lieseman, etc. Although, I would love to bend over Erin Burnett.
  • Dan-O
    Erin Burnett.... looks and acts like one of Santas elves.

    Last joke today, adios.
  • AP
    News headlines like "Record Unsold Homes" or "Sales Drop 13%" or "National Home Prices drop another 5%" have been priced into the stocks.

    However, I don't think that a headline like "Citadel rescues such and such Homebuilder for a fraction of it's share price" headline has been priced in.

    I think this headline would already be here if homebuilders were required to mark to market their property the way that the banks mark thier CMO's to the ABX index. Lucky fot the homebuilders, their writedowns are much more subjective.
  • AB
    Tim,
    I have been a fan of yours from day 1. I have been following you since your days on Wall Street Warriors. I have a question for you. First, I know that you are short biased and I really like your niche. I just began trading 6 months ago I am 18 years old and unfortunately I cannot short. I am stuck on only longing and for the most part it has been profittable, but do you have any advice for me on how to pick stocks going up and not down. Secondly, I have a 50k account that I trade with (only long positions) I have been putting huge amounts of that money in 1 stock and scalping and its been successful. Should I continue going after 1 stock and picking up a few points for quick profit or should I diversify and take away some risk. Let me know Tim.

    Thanks for all you have done,

    Andrew
  • Allen Lo
    tim! would you go long on NSTK? the chart looks good
  • Jibri
    Hey I watch CNBC, but I'm the newbie. Please forgive me!
  • Hugo
    this market used to eat food to survive, now eats air and media says is getting healthy, so much pain with credit crunch spreading all over, housing at it's low in years, food supply running out, and the market rallies 400-500 points in just a matter of days? really? can't people see that this market is full of air just like a balloon and soon will pop.

    Remember, summer is the hot time for housing, if they keep dropping what can we expect for winter?

    last, the FED is against the wall now, if they cut rates they will send the dollar lower, if they stop, its because they know they are screwing things up and making them worst,.

    All my positions are short, and just long on energy with the price of oil and the tension between iran/usa, things will get ugly.
  • Bubba's Discovery Before It Ha
    HA! Bubba discovered the housing bust coming by looking at the housing charts. By mid-2005 the charting was on the wall (read: the writing was on the wall). Why the anal-ist dint talk about it then is beyond Bubba's ken. Altho, Bubba must admit, he dint think it was gonna be as bad as it is.

    Yep, yuz right again, Timmy: charting is the rule #1 of due dillygentz.
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Date Stock Buy Sell Net
Nov 19 AENY $2.80 $3.02 $1148
Nov 18 NLST $4.16 $4.40 $947
Nov 18 IMGG $1.42 $1.64 $2094
Nov 17 NLST $5.04 $5.59 $2195
Nov 13 VRMLQ $21.50 $22.97 $2901
Nov 11 EONC $2.61 $2.80 $687
Nov 10 EONC $2.74 $3.36 $9784
Nov 6 QXM $4.31 $4.80 $1936
Nov 4 COT $8.66 $8.88 $642
Nov 4 QXM $4.61 $4.89 $822
Oct 30 DDRX $25.70 $26.53 $812
Oct 29 CTDC $4.00 $4.42 $781
Oct 26 AWSL $3.24 $4.10 $2516
Oct 23 RODM $5.27 $5.23 $301
Oct 22 AMLM $2.69 $2.97 $820
Oct 22 USEG $6.12 $6.09 $85
Oct 20 CBOU $8.93 $9.06 $243
Oct 16 VRMLQ $16.79 $18.65 $2773
Oct 13 YONG $11.05 $11.66 $1202
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Oct 12 IMGG $0.60 $0.70 $682
Oct 9 ZAGG $5.50 $6.10 $2380
Oct 7 GVBP $0.03 $0.27 $702
Oct 1 NPHC $0.70 $0.85 $1482

Total: $98,094 (681%)