Muted Response to The Street's Contrarian Housing Chatter

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Includes: IYR, XHB, XLY
by: David Fry

There has been a lot of "contrarian chatter" on Wall Street about buying the housing sector.

But there has been little actual response.

REITs are making new highs as merger/banking activity increases, and investors bet on higher yields as rents rise.

In the consumer sector, back-to-school rally time is here, but the sector is still in the doldrums overall.

So, we enter the first week of trading after the holiday with a modest rally on low to modest volume. The fifth anniversary of 9/11 will probably constrain markets and may lead to more buying in gold.

Bulls are in control at the moment and they’ll need a steady dose of good news to drive markets beyond previous highs. In times like this, bad news from the housing market sector bubble crash bursting slowdown soft-landing can be ignored.

I hope you all had a pleasant holiday weekend. Now that summer’s over, it’s back to business.