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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: GREENLAW4-7 who wrote (20444)	10/10/2003 9:21:22 AM
From: kodiak_bull	Read Replies (1) \| Respond to of 23153

Greenie, I dunno. The builders have confounded me at several points over the past couple of years, and have taught me more about the markets and the actions of stocks than I would have imagined. But the most important thing I've learned is not to tell the market, or a sector, or a stock, what it's going to do. Let it tell you, let it give you the signal, as to what it's going to do. The signal won't always be clear, or comprehensible, or even right, but if this methodology is mastered over years and years of practice, it will 1) give you signals from the most important source and 2) keep you from providing your own "story" to the market. When I look at BZH, RYL, TOL, HOV, DHI, I see stocks making new highs or testing old highs on good volume with positive indicators. I don't see divergences in price, volume or oscillators which tell me the wheels are coming off the vehicle. Yet. The market itself is in rally mode. Intraday people are jumping into and out of hot sectors with incredible rapidity. Yesterday airlines were hot, today it's retailers. Lots of beta, lots of $$$ available. Look at FLML over the last 2 years--while I was working my thesis about interest rates, housing cycles, materials cost--all with a view toward shorting or putting the homeboys, FLML has simply marched from $1.00 to $38. Maybe the homeboys will top and break soon, maybe not. I have to leave them to you and others for the moment, and concentrate on what really looks good in the short and intermediate term. Kb

To: GREENLAW4-7 who wrote (20444)	10/12/2003 11:53:53 PM
From: Archie Meeties	Read Replies (1) \| Respond to of 23153

Greenlaw, When I wanted to short the homeboys a while back I cooked up some charts that overlaid fed funds rate, mortgage rates, housing starts, and the share prices. As I recall, what I was surprised by was that there was not a tight inverse correlation between mortgage rates and housing starts. Instead, it seemed that mortgage rates needed to cross a certain threshold in order for starts to be off. Within a certain range, which varied over time, housing starts behaved as they wanted to. I abandoned the idea of shorting (after a few misses) when I realized that mortgage rates could fall further. On the bullish side, the demographic argument for a strong housing market remains intact, despite the economy. Furthermore, mortgage rates would really have to make a sustained upward move to slow housing. As for the bears, I guess one can entertain a short if you think one of two macroeconomic trends to overpower the demographic one. One is that fed will have to step in and defend the dollar at some time by raising rates. The other is relevant only if you believe Rubins assertion that a growing national deficit will likely result in a rise in interest rates. On another note, I think earnings get sold.