Did you hear that the median price for a new home dropped the largest amount the market has seen in over 35 years? Almost a 10% drop! Despite this movement, this market rallied towards the end of the day to finish up about 30 on the Dow and up about 22 on the Nasdaq. Does this mean it's a bull market?

Back to this housing data...I have been attempting to dabble in real estate, since it is relatively small work for good consistent chunks of money. I must admit that this move in the housing market really weighs on profits. What can you do?

Speaking of the housing bubble, watch XHB. This of course is the ETF for homebuilders. Ever since reaching a significant low in July, there has been slight but steady upward movement ever since. Homebuilders are a liquidity driven market and by nature are a leading indicator in the whole sector rotation phenomena. They are a must have in a watchlist when conducting market analysis.

If you find yourself in a position like me where the housing bubble has effected you in a negative way, use XHB to hedge your positions. That information would have been more useful yesterday, right?

I have a few things to clean up around here...I will get another post in shortly.

Posted by Option Addict on 10/26/2006 at 1:50 PM | Permalink